Xing Lu At Chuanglian Holdings Tops Up Holding By CN¥3.0m

Investors who take an interest in Chuanglian Holdings Limited (HKG:2371) should definitely note that insider Xing Lu recently paid HK$0.38 per share to buy HK$3.0m worth of the stock. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.

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Chuanglian Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Xing Lu was the biggest purchase of Chuanglian Holdings shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than HK$0.033 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Xing Lu was the only individual insider to buy shares in the last twelve months.

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!

View our latest analysis for Chuanglian Holdings

Chuanglian Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Chuanglian Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 Chuanglian Holdings insiders own 43% of the company, worth about HK$96m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Chuanglian Holdings Tell Us?

It's certainly positive to see the recent insider purchase. 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 Chuanglian Holdings. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chuanglian Holdings. Our analysis shows 2 warning signs for Chuanglian Holdings (1 shouldn't be ignored!) and we strongly recommend you look at these before investing.

But note: Chuanglian Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.