Huazhang Technology Holding Up 11%, Insiders Still Down After CN¥5.53m Purchase

Some of the losses seen by insiders who purchased CN¥5.53m worth of Huazhang Technology Holding Limited (HKG:1673) shares over the past year were recovered after the stock increased by 11% over the past week. However, total losses seen by insiders are still CN¥713k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Huazhang Technology Holding

Over the last year, we can see that the biggest insider purchase was by Executive Chairman of the Board Hui Fang for HK$2.7m worth of shares, at about HK$0.29 per share. That means that an insider was happy to buy shares at above the current price of HK$0.26. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Hui Fang.

Hui Fang bought a total of 18.51m shares over the year at an average price of HK$0.30. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Huazhang Technology Holding

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Does Huazhang Technology Holding 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. We usually like to see fairly high levels of insider ownership. It's great to see that Huazhang Technology Holding insiders own 51% of the company, worth about HK$210m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Huazhang Technology Holding Insiders?

It doesn't really mean much that no insider has traded Huazhang Technology Holding shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Huazhang Technology Holding insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. While conducting our analysis, we found that Huazhang Technology Holding has 1 warning sign and it would be unwise to ignore it.

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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.