Over the last year, a good number of insiders have significantly increased their holdings in Zhongsheng Group Holdings Limited (HKG:881). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Zhongsheng Group Holdings

The Co-Founder & Chairman Yi Huang made the biggest insider purchase in the last 12 months. That single transaction was for HK$23m worth of shares at a price of HK$27.45 each. That means that an insider was happy to buy shares at above the current price of HK$12.58. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Zhongsheng Group 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!

Zhongsheng Group Holdings 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 Zhongsheng Group Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Zhongsheng Group Holdings insiders own about HK$13b worth of shares (which is 43% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Zhongsheng Group Holdings Tell Us?

It doesn't really mean much that no insider has traded Zhongsheng Group Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Zhongsheng Group Holdings insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Zhongsheng Group Holdings.

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.

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