China Environmental Technology and Bioenergy Holdings Up 28%, Insider Buyers Are Up 18%

Last week, China Environmental Technology and Bioenergy Holdings Limited (HKG:1237) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 28% last week, resulting in a HK$7.8m increase in the company's market worth, implying a 18% gain on their initial purchase. Put another way, the original CN¥6.33m acquisition is now worth CN¥7.50m.

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

View our latest analysis for China Environmental Technology and Bioenergy Holdings

The Last 12 Months Of Insider Transactions At China Environmental Technology and Bioenergy Holdings

The CEO & Executive Director Zheyan Wu made the biggest insider purchase in the last 12 months. That single transaction was for HK$3.2m worth of shares at a price of HK$0.32 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.39. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

China Environmental Technology and Bioenergy Holdings insiders may have bought shares in the last year, but they didn't sell any. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At China Environmental Technology and Bioenergy Holdings Have Bought Stock Recently

Over the last quarter, China Environmental Technology and Bioenergy Holdings insiders have spent a meaningful amount on shares. In total, insiders bought HK$6.3m worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does China Environmental Technology and Bioenergy Holdings Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that China Environmental Technology and Bioenergy Holdings insiders own 46% of the company, worth about HK$16m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About China Environmental Technology and Bioenergy Holdings Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Environmental Technology and Bioenergy Holdings. That's what I like to see! 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 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in China Environmental Technology and Bioenergy 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 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.