Insiders Of Creative China Holdings Are Up 166% On Their CN¥34.6m Purchase

Last week, Creative China Holdings Limited (HKG:8368) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a HK$46m increase in the company's market worth, implying a 166% gain on their initial purchase. In other words, the original CN¥34.6m purchase is now worth CN¥92.1m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Creative China Holdings

The Last 12 Months Of Insider Transactions At Creative China Holdings

Over the last year, we can see that the biggest insider purchase was by insider Yu Yuan Ang for HK$19m worth of shares, at about HK$0.53 per share. We do like to see buying, but this purchase was made at well below the current price of HK$0.87. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Over the last year, we can see that insiders have bought 105.85m shares worth HK$35m. On the other hand they divested 24.89m shares, for HK$23m. Overall, Creative China Holdings insiders were net buyers during the last year. They paid about HK$0.33 on average. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

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

Creative China Holdings Insiders Bought Stock Recently

At Creative China Holdings,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, insider Yu Yuan Ang bought HK$19m worth of shares in that time. But insider Jian Wu sold shares worth HK$4.0m. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Creative China Holdings Boast High 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. It's great to see that Creative China Holdings insiders own 44% of the company, worth about HK$222m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Creative China Holdings Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Creative China Holdings. That's what I like to see! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 3 warning signs (2 don't sit too well with us!) that you ought to be aware of before buying any shares in Creative China Holdings.

Of course Creative China Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.