Zhong Jia Guo Xin Holdings' Market Cap Drops To HK$104m Leaving Insiders With Losses

Insiders who bought HK$28.1m worth of Zhong Jia Guo Xin Holdings Company Limited's (HKG:899) stock at an average buy price of HK$0.12 over the last year may be disappointed by the recent 16% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only HK$19.3m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Zhong Jia Guo Xin Holdings

Zhong Jia Guo Xin Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive Director, Yuguo Li, sold HK$23m worth of shares at a price of HK$0.10 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.079. So it may not tell us anything about how insiders feel about the current share price. Yuguo Li was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 244.61m shares for HK$28m. On the other hand they divested 226.80m shares, for HK$23m. Overall, Zhong Jia Guo Xin Holdings insiders were net buyers during the last year. 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.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Zhong Jia Guo Xin Holdings insiders own about HK$20m worth of shares. That equates to 20% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Zhong Jia Guo Xin Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Zhong Jia Guo Xin Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Zhong Jia Guo Xin Holdings and their transactions don't cause us concern. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 4 warning signs for Zhong Jia Guo Xin Holdings that deserve your attention before buying any shares.

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.