Insiders who acquired HK$28.6m worth of Zhong Jia Guo Xin Holdings Company Limited's (HKG:899) stock at an average price of HK$0.12 in the past 12 months may be dismayed by the recent 10% 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$24.3m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Zhong Jia Guo Xin Holdings

The Last 12 Months Of Insider Transactions At Zhong Jia Guo Xin Holdings

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman, Yuguo Li, sold HK$23m worth of shares at a price of HK$0.10 per share. So what is clear is that an insider saw fit to sell at around the current price of HK$0.098. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Yuguo Li was the only individual insider to sell shares in the last twelve months.

Over the last year, we can see that insiders have bought 247.78m shares worth HK$29m. On the other hand they divested 226.80m shares, for HK$23m. Overall, Zhong Jia Guo Xin Holdings insiders were net buyers 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Zhong Jia Guo Xin Holdings Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Zhong Jia Guo Xin Holdings, over the last three months. In fact, two insiders bought HK$28m worth of shares. But we did see Executive Chairman Yuguo Li sell shares worth HK$23m. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Does Zhong Jia Guo Xin Holdings Boast High 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. Insiders own 26% of Zhong Jia Guo Xin Holdings shares, worth about HK$29m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Zhong Jia Guo Xin Holdings Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Zhong Jia Guo Xin Holdings insiders are well aligned, and that they may think the share price is too low. While we like knowing 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. When we did our research, we found 5 warning signs for Zhong Jia Guo Xin Holdings (1 can't be ignored!) that we believe deserve your full attention.

Of course Zhong Jia Guo Xin Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.