Shanghai Chicmax Cosmetic Co., Ltd. (HKG:2145) shareholders (or potential shareholders) will be happy to see that the Independent Non-Executive Director, Yan Luo, recently bought a whopping HK$6.9m worth of stock, at a price of HK$34.56. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 23%.
See our latest analysis for Shanghai Chicmax Cosmetic
Shanghai Chicmax Cosmetic Insider Transactions Over The Last Year
In fact, the recent purchase by Independent Non-Executive Director Yan Luo was not their only acquisition of Shanghai Chicmax Cosmetic shares this year. Earlier in the year, they paid HK$40.51 per share in a HK$12m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$36.90). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Shanghai Chicmax Cosmetic insiders bought shares during the last year, they didn't sell. 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!
Shanghai Chicmax Cosmetic is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Shanghai Chicmax Cosmetic
For a common shareholder, it is worth checking how many shares are held by company 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 Shanghai Chicmax Cosmetic insiders own 40% of the company, worth about HK$5.9b. 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 Shanghai Chicmax Cosmetic Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Shanghai Chicmax Cosmetic insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Shanghai Chicmax Cosmetic 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.