Insiders Re-Evaluate Their HK$183.4m Stock Purchase As Renze Harvest International Falls To HK$405m

The recent price decline of 10.0% in Renze Harvest International Limited's (HKG:1282) stock may have disappointed insiders who bought HK$183.4m worth of shares at an average price of HK$0.13 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth HK$116.1m which is not ideal.

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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The Last 12 Months Of Insider Transactions At Renze Harvest International

The insider Zhi Xiong Shi made the biggest insider purchase in the last 12 months. That single transaction was for HK$142m worth of shares at a price of HK$0.13 each. That means that an insider was happy to buy shares at above the current price of HK$0.081. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Renze Harvest International insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Renze Harvest International

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 Renze Harvest International Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Renze Harvest International insiders own 45% of the company, worth about HK$181m. 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 Renze Harvest International Tell Us?

It doesn't really mean much that no insider has traded Renze Harvest International shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Renze Harvest International insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Renze Harvest International is showing 3 warning signs in our investment analysis, and 2 of those shouldn't be ignored...

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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