Last week, Shanghai Chicmax Cosmetic Co., Ltd. (HKG:2145) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a HK$3.3b increase in the company's market worth, implying a 78% gain on their initial purchase. In other words, the original CN¥67.7m purchase is now worth CN¥120.3m.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
We've discovered 1 warning sign about Shanghai Chicmax Cosmetic. View them for free.The Last 12 Months Of Insider Transactions At Shanghai Chicmax Cosmetic
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Yan Luo for HK$12m worth of shares, at about HK$40.51 per share. We do like to see buying, but this purchase was made at well below the current price of HK$67.00. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months Shanghai Chicmax Cosmetic insiders were buying shares, but not selling. 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!
View our latest analysis for Shanghai Chicmax Cosmetic
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).
Insider Ownership Of Shanghai Chicmax Cosmetic
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. Shanghai Chicmax Cosmetic insiders own 41% of the company, currently worth about HK$11b 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 Do The Shanghai Chicmax Cosmetic Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Shanghai Chicmax Cosmetic insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Shanghai Chicmax Cosmetic. While conducting our analysis, we found that Shanghai Chicmax Cosmetic has 1 warning sign and it would be unwise to ignore this.
But note: Shanghai Chicmax Cosmetic 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.