Insider Traders Lose CN¥72k As China High Speed Transmission Equipment Group Drops

The recent price decline of 16% in China High Speed Transmission Equipment Group Co., Ltd.'s (HKG:658) stock may have disappointed insiders who bought CN¥409.2k worth of shares at an average price of CN¥1.98 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥337.4k.

While insider transactions are not the most important thing when it comes to long-term investing, 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 China High Speed Transmission Equipment Group

In the last twelve months, the biggest single purchase by an insider was when insider Hsu Vivine H Wang bought HK$409k worth of shares at a price of HK$1.98 per share. That means that an insider was happy to buy shares at above the current price of HK$1.63. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Hsu Vivine H Wang.

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!

Check out our latest analysis for China High Speed Transmission Equipment Group

China High Speed Transmission Equipment Group is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does China High Speed Transmission Equipment Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that China High Speed Transmission Equipment Group insiders own 5.0% of the company, worth about HK$160m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The China High Speed Transmission Equipment Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded China High Speed Transmission Equipment Group shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like China High Speed Transmission Equipment Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for China High Speed Transmission Equipment Group (of which 2 are significant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.