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Should You Buy China Display Optoelectronics Technology Holdings Limited (HKG:334) When Insiders Do?
China Display Optoelectronics Technology Holdings Limited, an investment holding company, engages in the research, development, manufacture, distribution, and sale of liquid crystal display modules for mobile phones and tablets in Hong Kong, China, South Korea, and Taiwan. China Display Optoelectronics Technology Holdings's insiders have invested more than 3.37 million shares in the large-cap stocks within the past three months. Generally, insiders buying more shares in their own firm sends a bullish signal. A research published in The MIT Press (1998) concluded that stocks following insider buying outperformed the market by 4.5%. However, these signals may not be enough to gain conviction on whether to invest. I will be analysing whether these buying activities are supported by favourable future outlook and recent share price volatility.
Check out our latest analysis for China Display Optoelectronics Technology Holdings
Which Insiders Are Buying?

Is This Consistent With Future Growth?

Can Share Price Volatility Explain The Buy?
An alternative reason for recent trades could be insiders taking advantage of the share price volatility. A correlation could mean directors are trading on market inefficiencies based on their belief of the company’s intrinsic value. Within the past three months, China Display Optoelectronics Technology Holdings’s share price traded at a high of HK$0.83 and a low of HK$0.59. This suggests a relatively high volatility with large change of 40.68%. This movement is meaningful enough to trade on if insiders believe the market has mispriced their companies’ shares.Next Steps:
China Display Optoelectronics Technology Holdings’s insider meaningful buying activity tells us the shares are currently in favour, although the expected earnings growth challenges this conclusion, whilst a moderate share price movement could provide incentive to buy now. However, while insider transactions could be a helpful signal, it is definitely not sufficient on its own to make an investment decision. there are two important aspects you should further research:
- Financial Health: Does China Display Optoelectronics Technology Holdings have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of China Display Optoelectronics Technology Holdings? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
About SEHK:334
China Display Optoelectronics Technology Holdings
An investment holding company, engages in the research, development, manufacture, distribution, and sale of liquid crystal display modules for mobile phones and tablets.
Flawless balance sheet and good value.
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