Viewing insider transactions for Zhongyu Energy Holdings Limited's (HKG:3633 ) over the last year, we see that insiders were net buyers. This means that a larger number of shares were purchased by insiders in relation to shares sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
We've discovered 4 warning signs about Zhongyu Energy Holdings. View them for free.Zhongyu Energy Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board Wenliang Wang bought HK$2.4m worth of shares at a price of HK$4.90 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$4.21). 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Wenliang Wang was the only individual insider to buy during the last year.
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!
See our latest analysis for Zhongyu Energy Holdings
Zhongyu Energy Holdings 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.
Does Zhongyu Energy Holdings 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. It's great to see that Zhongyu Energy Holdings insiders own 37% of the company, worth about HK$4.3b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Zhongyu Energy Holdings Tell Us?
It doesn't really mean much that no insider has traded Zhongyu Energy Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Zhongyu Energy Holdings insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Zhongyu Energy Holdings is showing 4 warning signs in our investment analysis, and 2 of those don't sit too well with us...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.