Insiders who bought for 9.3 million Canadian yen from Qidian International Co.,Ltd. (HKG:1280) last year some of their losses were recouped, with the stock up 24% in the past week. However, the purchase turns out to be a costly gamble, as insider losses have totaled 3.6 million Canadian yen since the time of purchase.
Although we would never suggest that investors base their decisions solely on what a company’s directors have done, logic dictates that you pay attention to whether insiders are buying or selling shares.
Check out our latest analysis for Qidian International
The last 12 months of insider trading at Qidian International
In the past twelve months, the largest single insider purchase was when insider Yan Sun bought HK$5.5 million worth of shares at a price of HK$1.11 per share. This means that even when the stock price was above HK$0.63 (the recent price), an insider wanted to buy some stock. Although their perspective has changed since the purchase, it at least suggests they have confidence in the company’s future. For us, it is very important to consider the price that insiders pay for the shares. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.
Over the past twelve months, Qidian International insiders have been buying shares, but not selling. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
There are many other companies whose insiders buy shares. You probably do do not want to miss this free list of growing companies insiders are buying.
Does Qidian International boast of high insider ownership?
Many investors like to check how much a company is owned by insiders. High insider participation often makes company management more concerned with the interests of shareholders. It appears that Qidian International insiders own 35% of the company, which is worth around HK$48 million. We have certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.
What could insider trading at Qidian International tell us?
It doesn’t mean much that no insider has traded shares of Qidian International in the last quarter. On a more positive note, last year’s transactions are encouraging. Insiders have a stake in Qidian International and their transactions are of no concern to us. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. For example, Qidian International has 4 warning signs (and 1 which is a little worrying) that we think you should know about.
Sure Qidian International may not be the best stock to buy. So you might want to see this free set of high quality companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.