Whilst it may not be a huge deal, we thought it was good to see that the China Weaving Materials Holdings Limited (HKG:3778) CEO & Executive Director, Yongxiang Zheng, recently bought HK$495k worth of stock, for HK$0.33 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.
Check out our latest analysis for China Weaving Materials Holdings
China Weaving Materials Holdings Insider Transactions Over The Last Year
Notably, that recent purchase by CEO & Executive Director Yongxiang Zheng was not the only time they bought China Weaving Materials Holdings shares this year. They previously made an even bigger purchase of HK$20m worth of shares at a price of HK$0.39 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.32). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Yongxiang Zheng was the only individual insider to buy shares in the last twelve months.
Yongxiang Zheng bought a total of 105.25m shares over the year at an average price of HK$0.33. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 China Weaving Materials Holdings Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. China Weaving Materials Holdings insiders own about HK$236m worth of shares (which is 59% of the company). 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 Does This Data Suggest About China Weaving Materials Holdings Insiders?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Weaving Materials Holdings. Nice! While it's good to be aware of 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. For instance, we've identified 3 warning signs for China Weaving Materials Holdings (2 are potentially serious) you should be aware of.
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.