Looking at Nongfu Spring Co., Ltd.'s (HKG:9633 ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Nongfu Spring
Nongfu Spring Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Founder Shanshan Zhong for HK$118m worth of shares, at about HK$33.73 per share. That implies that an insider found the current price of HK$36.05 per share to be enticing. 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 Nongfu Spring insider decided to buy shares at close to current prices. Shanshan Zhong was the only individual insider to buy during the last year.
Shanshan Zhong purchased 7.00m shares over the year. The average price per share was HK$32.16. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Nongfu Spring is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership Of Nongfu Spring
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Nongfu Spring insiders own 84% of the company, currently worth about HK$342b based on the recent share price. 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 Do The Nongfu Spring Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Nongfu Spring shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Nongfu Spring insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Nongfu Spring. Every company has risks, and we've spotted 1 warning sign for Nongfu Spring you should know about.
But note: Nongfu Spring may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.