Need To Know: China Harmony New Energy Auto Holding Limited (HKG:3836) Insiders Have Been Buying Shares
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell China Harmony New Energy Auto Holding Limited (HKG:3836), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
Check out our latest analysis for China Harmony New Energy Auto Holding
The Last 12 Months Of Insider Transactions At China Harmony New Energy Auto Holding
Notably, that recent purchase by Executive Chairman of the Board Changge Feng was not the only time they bought China Harmony New Energy Auto Holding shares this year. They previously made an even bigger purchase of HK$3.3m worth of shares at a price of HK$3.34 per share. So it's clear an insider wanted to buy, at around the current price, which is HK$3.56. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the China Harmony New Energy Auto Holding insider decided to buy shares at close to current prices. Changge Feng was the only individual insider to buy during the last year.
Changge Feng bought 1.74m shares over the last 12 months at an average price of HK$3.33. You can see a visual depiction of insider transactions (by 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. We usually like to see fairly high levels of insider ownership. China Harmony New Energy Auto Holding insiders own 44% of the company, currently worth about HK$2.5b based on the recent share price. 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 China Harmony New Energy Auto Holding Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest China Harmony New Energy Auto Holding insiders are well aligned, and quite possibly think the share price is too low. Nice! 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. You'd be interested to know, that we found 1 warning sign for China Harmony New Energy Auto Holding and we suggest you have a look.
Of course China Harmony New Energy Auto Holding 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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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