China Qinfa Group Insider Buyers Pleased With CN¥222m Return On Investment

Insiders who bought China Qinfa Group Limited (HKG:866) stock lover the last 12 months are probably not as affected by last week’s 15% loss. After taking the recent loss into consideration, the CN¥281.3m worth of stock they bought is now worth CN¥503.7m, indicating that their investment yielded a positive return.

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.

View our latest analysis for China Qinfa Group

The Last 12 Months Of Insider Transactions At China Qinfa Group

The insider Jihua Xu made the biggest insider purchase in the last 12 months. That single transaction was for HK$148m worth of shares at a price of HK$0.77 each. We do like to see buying, but this purchase was made at well below the current price of HK$1.38. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Jihua Xu bought 364.99m shares over the last 12 months at an average price of HK$0.77. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does China Qinfa Group Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. China Qinfa Group insiders own about HK$2.4b worth of shares (which is 70% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The China Qinfa Group Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, China Qinfa Group insiders feel good about the company's 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. While conducting our analysis, we found that China Qinfa Group has 2 warning signs and it would be unwise to ignore these.

But note: China Qinfa Group 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.