Insiders of Tian Chang Group Holdings Getting Good Value On Their HK$5.43m Investment

Insiders who bought Tian Chang Group Holdings Ltd. (HKG:2182) stock in the last 12 months were richly rewarded last week. The company's market value increased by HK$40m as a result of the stock's 16% gain over the same period. In other words, the original HK$5.43m purchase is now worth HK$6.34m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Tian Chang Group Holdings

The Last 12 Months Of Insider Transactions At Tian Chang Group Holdings

In fact, the recent purchase by Chairman & CEO Tsan Lam Chan was not their only acquisition of Tian Chang Group Holdings shares this year. They previously made an even bigger purchase of HK$2.0m worth of shares at a price of HK$0.42 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.47), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Tsan Lam Chan purchased 13.49m shares over the year. The average price per share was HK$0.40. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Tian Chang Group Holdings insiders own 64% of the company, worth about HK$188m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Tian Chang Group Holdings Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Tian Chang Group Holdings. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tian Chang Group Holdings. Every company has risks, and we've spotted 2 warning signs for Tian Chang Group Holdings you should know about.

But note: Tian Chang Group 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.