Insider Buying: The Capital Finance Holdings Limited (HKG:8239) Executive Chairman & CEO Just Bought 200% More Shares

Those following along with Capital Finance Holdings Limited (HKG:8239) will no doubt be intrigued by the recent purchase of shares by Wei Zhang, Executive Chairman & CEO of the company, who spent a stonking HK$6.1m on stock at an average price of HK$0.13. That increased their holding by a full 200%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

See our latest analysis for Capital Finance Holdings

The Last 12 Months Of Insider Transactions At Capital Finance Holdings

In fact, the recent purchase by Wei Zhang was the biggest purchase of Capital Finance Holdings shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is HK$0.14. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Capital Finance Holdings insiders decided to buy shares at close to current prices.

Capital Finance Holdings insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Capital Finance Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Capital Finance Holdings insiders own 15% of the company, worth about HK$18m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Capital Finance Holdings Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Capital Finance Holdings shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Capital Finance Holdings (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.

But note: Capital Finance Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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