Insiders Enjoy HK$2.3m Return After Buying Zhong Jia Guo Xin Holdings Stock

Insiders who bought Zhong Jia Guo Xin Holdings Company Limited (HKG:899) in the last 12 months may probably not pay attention to the stock's recent 10% drop. Reason being, despite the recent loss, insiders original purchase value of HK$8.78m is now worth HK$11.1m.

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.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

The Last 12 Months Of Insider Transactions At Zhong Jia Guo Xin Holdings

In the last twelve months, the biggest single purchase by an insider was when insider Jia Yi Li bought HK$6.8m worth of shares at a price of HK$0.15 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.18), we still think insider buying is a positive. 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 Zhong Jia Guo Xin Holdings insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Zhong Jia Guo Xin Holdings

Zhong Jia Guo Xin 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Zhong Jia Guo Xin Holdings insiders own about HK$20m worth of shares. That equates to 24% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Zhong Jia Guo Xin Holdings Tell Us?

It doesn't really mean much that no insider has traded Zhong Jia Guo Xin Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Zhong Jia Guo Xin Holdings and their transactions don't cause us concern. 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 4 warning signs for Zhong Jia Guo Xin Holdings (2 are significant) you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.