China Qinfa Group Limited (HKG:866) shareholders (or potential shareholders) will be happy to see that the Executive Director & VP, Yifeng Zhai, recently bought a whopping HK$38m worth of stock, at a price of HK$1.18. That purchase boosted their holding by 1,600%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
The Last 12 Months Of Insider Transactions At China Qinfa Group
Over the last year, we can see that the biggest insider purchase was by insider Jihua Xu for HK$148m worth of shares, at about HK$0.77 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$1.38. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months China Qinfa Group 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. 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).
Does China Qinfa Group Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 Qinfa Group insiders own 70% of the company, worth about HK$2.4b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At China Qinfa Group Tell Us?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest China Qinfa Group insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. While conducting our analysis, we found that China Qinfa Group has 2 warning signs and it would be unwise to ignore them.
But note: China Qinfa Group 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.
