Zhi Tian Lai Buys Handful Of Shares In Zhongzhi Pharmaceutical Holdings

Those following along with Zhongzhi Pharmaceutical Holdings Limited (HKG:3737) will no doubt be intrigued by the recent purchase of shares by Zhi Tian Lai, Chairman of the company, who spent a stonking HK$6.0m on stock at an average price of HK$1.20. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 1.0%.

Check out our latest analysis for Zhongzhi Pharmaceutical Holdings

The Last 12 Months Of Insider Transactions At Zhongzhi Pharmaceutical Holdings

In fact, the recent purchase by Zhi Tian Lai was the biggest purchase of Zhongzhi Pharmaceutical Holdings shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is HK$1.22. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Zhongzhi Pharmaceutical Holdings share holders is that an insider was buying at near the current price. Zhi Tian Lai was the only individual insider to buy during the last year.

Zhi Tian Lai purchased 29.87m shares over the year. The average price per share was HK$1.21. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Zhongzhi Pharmaceutical Holdings insiders own 66% of the company, worth about HK$694m. 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 Do The Zhongzhi Pharmaceutical Holdings Insider Transactions Indicate?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Zhongzhi Pharmaceutical Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Zhongzhi Pharmaceutical Holdings (1 is a bit concerning!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.