Insider Buyers At Hengdeli Holdings Sitting On CN¥115m Profit

Insiders who bought Hengdeli Holdings Limited (HKG:3389) in the last 12 months may probably not pay attention to the stock's recent 14% drop. Reason being, despite the recent loss, insiders original purchase value of CN¥139.4m is now worth CN¥253.9m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Hengdeli Holdings Insider Transactions Over The Last Year

The CEO & Executive Chairman Wing Lun Cheung made the biggest insider purchase in the last 12 months. That single transaction was for HK$61m worth of shares at a price of HK$0.14 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.26. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Wing Lun Cheung purchased 995.71m shares over the year. The average price per share was HK$0.14. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Hengdeli Holdings

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.

Does Hengdeli Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Hengdeli Holdings insiders own about HK$795m worth of shares (which is 71% of the company). 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 Do The Hengdeli Holdings Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Hengdeli Holdings insiders feel good about the company's future. 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 1 warning sign for Hengdeli Holdings that deserve your attention before buying any shares.

But note: Hengdeli Holdings 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.