Insider Buying: The Changhong Jiahua Holdings Limited (HKG:3991) President Just Bought 28% More Shares

By
Simply Wall St
Published
June 03, 2021
SEHK:3991
Source: Shutterstock

Those following along with Changhong Jiahua Holdings Limited (HKG:3991) will no doubt be intrigued by the recent purchase of shares by Jianqiu Zhu, President of the company, who spent a stonking HK$22m on stock at an average price of HK$0.90. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 28%.

Check out our latest analysis for Changhong Jiahua Holdings

Changhong Jiahua Holdings Insider Transactions Over The Last Year

Notably, that recent purchase by Jianqiu Zhu is the biggest insider purchase of Changhong Jiahua Holdings shares that we've seen in the last year. That means that even when the share price was higher than HK$0.84 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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. Jianqiu Zhu was the only individual insider to buy shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
SEHK:3991 Insider Trading Volume June 4th 2021

Changhong Jiahua 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

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Changhong Jiahua Holdings insiders own about HK$76m worth of shares (which is 3.5% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Changhong Jiahua Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Changhong Jiahua Holdings shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 3 warning signs (2 are potentially serious!) that you ought to be aware of before buying any shares in Changhong Jiahua Holdings.

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, but not derivative transactions.

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