Favorable turn of events for China Netcom Technology Holdings Limited (HKG:8071) insiders who've lost HK$1.1m to date on a HK$4.1m purchase

By
Simply Wall St
Published
February 16, 2022
SEHK:8071
Source: Shutterstock

Insiders who bought HK$4.1m worth of China Netcom Technology Holdings Limited (HKG:8071) stock in the last year recovered part of their losses as the stock rose by 14% last week. However, total losses seen by insiders are still HK$1.1m but in since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for China Netcom Technology Holdings

China Netcom Technology Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Lei Zuo bought HK$2.4m worth of shares at a price of HK$0.043 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.033). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Lei Zuo was the only individual insider to buy during the last year.

Lei Zuo bought a total of 89.37m shares over the year at an average price of HK$0.046. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SEHK:8071 Insider Trading Volume February 16th 2022

China Netcom Technology Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Our data indicates that China Netcom Technology Holdings insiders own about HK$11m worth of shares (which is 7.1% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At China Netcom Technology Holdings Tell Us?

It doesn't really mean much that no insider has traded China Netcom Technology Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in China Netcom Technology Holdings and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Netcom Technology Holdings. In terms of investment risks, we've identified 2 warning signs with China Netcom Technology Holdings and understanding them should be part of your investment process.

But note: China Netcom Technology Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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