Insiders' CN¥204.8m Investments In Red Following Zhongshen Jianye Holding's HK$57m Dip In Market Value

Insiders who bought CN¥204.8m worth of Zhongshen Jianye Holding Limited's (HKG:2503) stock at an average buy price of CN¥0.53 over the last year may be disappointed by the recent 10% decrease in the stock. 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¥166.2m.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Zhongshen Jianye Holding

Over the last year, we can see that the biggest insider purchase was by insider Yan Wang for HK$143m worth of shares, at about HK$0.53 per share. That means that an insider was happy to buy shares at above the current price of HK$0.43. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Zhongshen Jianye Holding insiders may have bought shares in the last year, but they didn't sell any. 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!

View our latest analysis for Zhongshen Jianye Holding

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.

Zhongshen Jianye Holding Insiders Bought Stock Recently

Over the last quarter, Zhongshen Jianye Holding insiders have spent a meaningful amount on shares. Overall, two insiders shelled out HK$205m for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership Of Zhongshen Jianye Holding

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Zhongshen Jianye Holding insiders own 67% of the company, worth about HK$330m. 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 Does This Data Suggest About Zhongshen Jianye Holding Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Zhongshen Jianye Holding. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zhongshen Jianye Holding. Our analysis shows 3 warning signs for Zhongshen Jianye Holding (2 shouldn't be ignored!) and we strongly recommend you look at these before investing.

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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.