From what we can see, insiders were net buyers in China Medical System Holdings Limited's (HKG:867 ) during the past 12 months. That is, insiders acquired the stock in greater numbers than they sold it.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
China Medical System Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Founder Kong Lam bought HK$7.3m worth of shares at a price of HK$7.32 per share. That means that an insider was happy to buy shares at around the current price of HK$7.78. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for China Medical System Holdings share holders is that an insider was buying at near the current price. Kong Lam was the only individual insider to buy shares in the last twelve months.
Kong Lam purchased 30.00m shares over the year. The average price per share was HK$7.14. 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!
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.
Insider Ownership Of China Medical System Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. China Medical System Holdings insiders own about HK$9.7b worth of shares (which is 52% 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 Does This Data Suggest About China Medical System Holdings Insiders?
It's certainly positive 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. At Simply Wall St, we found 2 warning signs for China Medical System Holdings that deserve your attention before buying any shares.
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.
