Stock Analysis

Insiders who bought into China Overseas Grand Oceans Group Limited (HKG:81) earlier this year might wish they'd invested more as stock gained 9.5%

  •  Updated
Source: Shutterstock

China Overseas Grand Oceans Group Limited (HKG:81) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 9.5% resulting in a HK$1.3b addition to the company’s market value. In other words, the original CN¥1.9m purchase is now worth CN¥2.2m.

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 China Overseas Grand Oceans Group

China Overseas Grand Oceans Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board Yong Zhuang bought HK$967k worth of shares at a price of HK$3.87 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$4.39), 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.

Yong Zhuang bought a total of 500.00k shares over the year at an average price of HK$3.83. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

SEHK:81 Insider Trading Volume March 22nd 2022

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

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. China Overseas Grand Oceans Group insiders own about HK$1.8b worth of shares (which is 12% of the company). 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 China Overseas Grand Oceans Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded China Overseas Grand Oceans Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like China Overseas Grand Oceans Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that China Overseas Grand Oceans Group has 2 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

Of course China Overseas Grand Oceans Group 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, but not derivative transactions.

Valuation is complex, but we're helping make it simple.

Find out whether China Overseas Grand Oceans Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis