Insiders Re-Evaluate Their HK$183.4m Stock Purchase As Renze Harvest International Falls To HK$355m

The recent 10% drop in Renze Harvest International Limited's (HKG:1282) stock could come as a blow to insiders who purchased HK$183.4m worth of stock at an average buy price of HK$0.13 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth HK$101.7m which is not ideal.

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 Renze Harvest International

In the last twelve months, the biggest single purchase by an insider was when insider Zhi Xiong Shi bought HK$142m worth of shares at a price of HK$0.13 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.071). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Renze Harvest International insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. 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 Renze Harvest International

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Renze Harvest International

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Renze Harvest International insiders own about HK$159m worth of shares (which is 45% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Renze Harvest International Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Renze Harvest International insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Renze Harvest International. At Simply Wall St, we've found that Renze Harvest International has 3 warning signs (2 are concerning!) that deserve your attention before going any further with your analysis.

But note: Renze Harvest International 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.