Potential China Medical System Holdings Limited (HKG:867) shareholders may wish to note that the Founder, Kong Lam, recently bought HK$3.6m worth of stock, paying HK$7.23 for each share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

China Medical System Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by Founder Kong Lam was not their only acquisition of China Medical System Holdings shares this year. Earlier in the year, they paid HK$7.32 per share in a HK$7.3m purchase. That means that an insider was happy to buy shares at above the current price of HK$7.19. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. 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. Kong Lam was the only individual insider to buy shares in the last twelve months.

Kong Lam bought a total of 21.00m shares over the year at an average price of HK$7.05. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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 China Medical System Holdings

Many investors like to check how much of a company is owned by insiders. 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 China Medical System Holdings insiders own 51% of the company, worth about HK$8.9b. 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 Does This Data Suggest About China Medical System Holdings Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest China Medical System Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. In terms of investment risks, we've identified 2 warning signs with China Medical System Holdings and understanding them should be part of your investment process.

Of course China Medical System Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.