Zhi Sheng Group Holdings Insider Buyers See Boost After Market Cap Rose HK$94m

Last week, Zhi Sheng Group Holdings Limited (HKG:8370) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a HK$94m increase in the company's market worth, implying a 1,600% gain on their initial purchase. In other words, the original CN¥13.5m purchase is now worth CN¥229.5m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Zhi Sheng Group Holdings

The CEO & Executive Director Ningning Lai made the biggest insider purchase in the last 12 months. That single transaction was for HK$9.9m worth of shares at a price of HK$0.30 each. Even though the purchase was made at a significantly lower price than the recent price (HK$5.10), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Zhi Sheng Group Holdings insiders may have bought shares in the last year, but they didn't sell any. 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 Zhi Sheng Group 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.

Insider Ownership Of Zhi Sheng Group Holdings

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 Zhi Sheng Group Holdings insiders own 58% of the company, worth about HK$452m. 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 Zhi Sheng Group Holdings Tell Us?

The fact that there have been no Zhi Sheng Group Holdings insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Zhi Sheng Group Holdings insiders think the business has merit. 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. You'd be interested to know, that we found 2 warning signs for Zhi Sheng Group Holdings and we suggest you have a look.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.