Should You Take Comfort From Insider Transactions At China Sanjiang Fine Chemicals Company Limited (HKG:2198)?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in China Sanjiang Fine Chemicals Company Limited (HKG:2198).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for China Sanjiang Fine Chemicals

The Last 12 Months Of Insider Transactions At China Sanjiang Fine Chemicals

In the last twelve months, the biggest single purchase by an insider was when insider Jianzhong Guan bought HK$2.7m worth of shares at a price of HK$2.10 per share. We do like to see buying, but this purchase was made at well below the current price of HK$3.64. 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.

China Sanjiang Fine Chemicals insiders may have bought shares in the last year, but they didn't sell any. 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!

China Sanjiang Fine Chemicals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

China Sanjiang Fine Chemicals Insiders Bought Stock Recently

There was some insider buying at China Sanjiang Fine Chemicals over the last quarter. insider Jianping Han shelled out HK$120k for shares in that time. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. China Sanjiang Fine Chemicals insiders own about HK$83m worth of shares. That equates to 1.8% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At China Sanjiang Fine Chemicals Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of China Sanjiang Fine Chemicals we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Sanjiang Fine Chemicals. You'd be interested to know, that we found 3 warning signs for China Sanjiang Fine Chemicals and we suggest you have a look.

But note: China Sanjiang Fine Chemicals 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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This article by Simply Wall St is general in nature. 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.
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