Bullish China Qidian Guofeng Holdings Insiders Rewarded As Their Investment Rises To CN¥1.40b

Last week, China Qidian Guofeng Holdings Limited (HKG:1280) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a HK$686m increase in the company's market worth, implying a 825% gain on their initial purchase. In other words, the original CN¥151.9m purchase is now worth CN¥1.40b.

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

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The Last 12 Months Of Insider Transactions At China Qidian Guofeng Holdings

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Li Yuan bought HK$97m worth of shares at a price of HK$0.40 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$3.70. 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.

In the last twelve months China Qidian Guofeng Holdings insiders were buying shares, but not selling. 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!

View our latest analysis for China Qidian Guofeng Holdings

China Qidian Guofeng Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does China Qidian Guofeng Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. China Qidian Guofeng Holdings insiders own about HK$2.9b worth of shares (which is 43% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At China Qidian Guofeng Holdings Tell Us?

The fact that there have been no China Qidian Guofeng Holdings insider transactions recently certainly doesn't bother us. 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 Qidian Guofeng Holdings 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. Case in point: We've spotted 4 warning signs for China Qidian Guofeng Holdings you should be aware of, and 3 of them are potentially serious.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.