Insiders Give Up HK$228k As Zijing International Financial Holdings Stock Drops To HK$0.13

The recent price decline of 33% in Zijing International Financial Holdings Limited's (HKG:8340) stock may have disappointed insiders who bought HK$799.8k worth of shares at an average price of HK$0.19 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth HK$571.9k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Zijing International Financial Holdings

The Last 12 Months Of Insider Transactions At Zijing International Financial Holdings

In fact, the recent purchase by Kun Ma was the biggest purchase of Zijing International Financial Holdings shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than HK$0.13 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Kun Ma was the only individual insider to buy shares in the last twelve months.

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!

Zijing International Financial Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Zijing International Financial Holdings

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own HK$3.1m worth of Zijing International Financial Holdings stock, about 3.8% of the company. I generally like to see higher levels of ownership.

So What Do The Zijing International Financial Holdings Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Zijing International Financial Holdings insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 5 warning signs for Zijing International Financial Holdings (3 don't sit too well with us!) that we believe deserve your full attention.

But note: Zijing International Financial 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com