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Trade Alert: The Executive Chairman Of Huajun International Group Limited (HKG:377), Guang Bao Meng, Has Just Spent CN¥112k Buying Shares

Simply Wall St

Even if it's not a huge purchase, we think it was good to see that Guang Bao Meng, the Executive Chairman of Huajun International Group Limited (HKG:377) recently shelled out HK$112k to buy stock, at HK$10.65 per share. However, we do note that it only increased their holding by 0.02%, and it wasn't a huge purchase by absolute value, either.

See our latest analysis for Huajun International Group

Huajun International Group Insider Transactions Over The Last Year

In fact, the recent purchase by Executive Chairman Guang Bao Meng was not their only acquisition of Huajun International Group shares this year. Earlier in the year, they paid HK$14.88 per share in a HK$3.7m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$12.78). 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 is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Guang Bao Meng.

Guang Bao Meng bought 277.76k shares over the last 12 months at an average price of HK$14.41. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

SEHK:377 Recent Insider Trading, December 20th 2019

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).

Insider Ownership of Huajun International Group

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. Huajun International Group insiders own about HK$571m worth of shares (which is 74% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Huajun International Group Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Huajun International Group insiders are well aligned, and quite possibly think the share price is too low. Nice! To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Of course Huajun International Group 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.