Those following along with China SCE Group Holdings Limited (HKG:1966) will no doubt be intrigued by the recent purchase of shares by Chiu Wong, Chairman of the company, who spent a stonking HK$9.9m on stock at an average price of HK$3.31. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.1%.
China SCE Group Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Vice Chairman Yuanlai Chen bought HK$210m worth of shares at a price of HK$3.80 per share. That means that even when the share price was higher than HK$3.34 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 118.46m shares worth HK$447m. But they sold 90000000 shares for HK$342m. In the last twelve months there was more buying than selling by China SCE Group Holdings insiders. The chart below shows insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. 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 SCE Group Holdings insiders own 61% of the company, worth about HK$8.5b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At China SCE Group Holdings Tell Us?
It's certainly positive 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 SCE Group Holdings insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! While we like knowing 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. Be aware that China SCE Group Holdings is showing 5 warning signs in our investment analysis, and 1 of those is significant...
But note: China SCE Group 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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