Insiders who purchased HK$154.7m worth of China Cultural Tourism and Agriculture Group Limited (HKG:542) shares over the past year recouped some of their losses after price gained 44% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling HK$72m.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for China Cultural Tourism and Agriculture Group
China Cultural Tourism and Agriculture Group Insider Transactions Over The Last Year
The insider Kaijun Chen made the biggest insider purchase in the last 12 months. That single transaction was for HK$148m worth of shares at a price of HK$0.20 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.10). 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 785.61m shares worth HK$155m. On the other hand they divested 222.05m shares, for HK$33m. In total, China Cultural Tourism and Agriculture Group insiders bought more than they sold over the last year. 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!
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).
Insiders At China Cultural Tourism and Agriculture Group Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at China Cultural Tourism and Agriculture Group. In that time, insiders dumped HK$33m worth of shares. Meanwhile insider Anfeng Huang bought HK$5.6m worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Does China Cultural Tourism and Agriculture Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. China Cultural Tourism and Agriculture Group insiders own 66% of the company, currently worth about HK$529m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About China Cultural Tourism and Agriculture Group Insiders?
The insider sales have outweighed the insider buying, at China Cultural Tourism and Agriculture Group, in the last three months. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Cultural Tourism and Agriculture Group. To help with this, we've discovered 4 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in China Cultural Tourism and Agriculture Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com