Read This Before Selling Changhong Jiahua Holdings Limited (HKG:3991) Shares

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Changhong Jiahua Holdings Limited (HKG:3991).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Changhong Jiahua Holdings

The Last 12 Months Of Insider Transactions At Changhong Jiahua Holdings

Over the last year, we can see that the biggest insider purchase was by President Jianqiu Zhu for HK$5.6m worth of shares, at about HK$0.72 per share. That means that an insider was happy to buy shares at around the current price of HK$0.78. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Changhong Jiahua Holdings insider decided to buy shares at close to current prices. Jianqiu Zhu was the only individual insider to buy during the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does Changhong Jiahua Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Changhong Jiahua Holdings insiders own 3.5% of the company, worth about HK$70m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Changhong Jiahua Holdings Insider Transactions Indicate?

The fact that there have been no Changhong Jiahua Holdings insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Changhong Jiahua Holdings insiders are doubting the company, and they do own shares. 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. Be aware that Changhong Jiahua Holdings is showing 4 warning signs in our investment analysis, and 2 of those are a bit unpleasant...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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This article by Simply Wall St is general in nature. 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.
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