China Fortune Holdings' HK$8.5m Market Cap Fall Books Insider Losses

Insiders who acquired HK$2.60m worth of China Fortune Holdings Limited's (HKG:110) stock at an average price of HK$0.26 in the past 12 months may be dismayed by the recent 15% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth HK$2.30m which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for China Fortune Holdings

The Last 12 Months Of Insider Transactions At China Fortune Holdings

In the last twelve months, the biggest single purchase by an insider was when Executive Director Jianwu Li bought HK$2.6m worth of shares at a price of HK$0.26 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.23). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Jianwu Li was the only individual insider to buy 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 always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of China Fortune Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. China Fortune Holdings insiders own 60% of the company, currently worth about HK$29m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About China Fortune Holdings Insiders?

The fact that there have been no China Fortune Holdings insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like China Fortune Holdings insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Fortune Holdings. For instance, we've identified 4 warning signs for China Fortune Holdings (3 are a bit unpleasant) you should be aware of.

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.