China Supply Chain Holdings Insider Buyers Pleased With HK$40m Return On Investment

China Supply Chain Holdings Limited (HKG:3708) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 22% decline in the stock price. After taking the recent loss into consideration, the HK$13.9m worth of stock they bought is now worth HK$53.5m, indicating that their investment yielded a positive return.

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

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The Last 12 Months Of Insider Transactions At China Supply Chain Holdings

In the last twelve months, the biggest single purchase by an insider was when insider Kai Li bought HK$8.1m worth of shares at a price of HK$0.012 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.047. 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.

In the last twelve months China Supply Chain Holdings insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for China Supply Chain Holdings

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 Supply Chain Holdings Have Bought Stock Recently

It's good to see that China Supply Chain Holdings insiders have made notable investments in the company's shares. Specifically, insider Kwok Fan Li bought HK$400k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that China Supply Chain Holdings insiders own 74% of the company, worth about HK$232m. 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 Do The China Supply Chain Holdings Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Supply Chain Holdings. That's what I like to see! 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. For instance, we've identified 3 warning signs for China Supply Chain Holdings (1 makes us a bit uncomfortable) you should be aware of.

But note: China Supply Chain 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.