Insiders' HK$46.1m Investments In Red Following China Zenith Chemical Group's HK$14m Dip In Market Value

Insiders who bought HK$46.1m worth of China Zenith Chemical Group Limited's (HKG:362) stock at an average buy price of HK$0.12 over the last year may be disappointed by the recent 10% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth HK$35.2m, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for China Zenith Chemical Group

The Last 12 Months Of Insider Transactions At China Zenith Chemical Group

In the last twelve months, the biggest single sale by an insider was when the Executive Director, Yiduan Tang, sold HK$21m worth of shares at a price of HK$0.15 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.089. So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 395.26m shares for HK$46m. But insiders sold 203.64m shares worth HK$28m. Overall, China Zenith Chemical Group insiders were net buyers during the last year. They paid about HK$0.12 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

China Zenith Chemical Group is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At China Zenith Chemical Group Have Bought Stock Recently

Over the last quarter, China Zenith Chemical Group insiders have spent a meaningful amount on shares. insider Cheung Hung spent HK$1.5m on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership Of China Zenith Chemical Group

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. Insiders own 31% of China Zenith Chemical Group shares, worth about HK$37m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At China Zenith Chemical Group Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest China Zenith Chemical Group insiders are well aligned, and that they may think the share price is too low. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 5 warning signs we've spotted with China Zenith Chemical Group (including 2 which are a bit unpleasant).

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.