Beijing Chunlizhengda Medical Instruments Co., Ltd. (HKG:1858) insiders who bought stocks in the past 12 months were richly rewarded last week. The stock rose 15%, leading to a HK$573 million increase in the company’s market value. As a result, the stock they originally bought for 3.3 million yen is now worth 3.8 million yen.
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 Beijing Chunlizhengda Medical Instruments
The past 12 months of insider trading in Beijing Chunlizhengda Medical Instruments
Executive Director Chunbao Shi made the biggest insider buy in the past 12 months. This single transaction was for HK$2.6 million of shares at a price of HK$10.37 each. This implies that an insider found the current price of HK$11.42 per share attractive. This means that they have been optimistic about the company in the past, although they may have changed their minds. While we always like to see insider buys, it makes less sense if the buys were made at much lower prices, as the opportunity they saw may have passed. The good news for Beijing Chunlizhengda Medical Instruments shareholders is that an insider was buying at a price close to the current price. Chunbao Shi was the only individual insider to buy in the past year.
Chunbao Shi purchased 331,000 shares during the year. The average price per share was HK$10.06. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. If you click on the chart, you can see all individual trades including stock price, individual and date!
Beijing Chunlizhengda Medical Instruments isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.
Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. High insider participation often makes company management more concerned with the interests of shareholders. Beijing Chunlizhengda Medical Instruments insiders own about HK$4.4 billion in shares (or 60% of the company). This type of significant insider ownership generally increases the chances that the company will be run in the best interests of all shareholders.
What could insider trading at Beijing Chunlizhengda Medical Instruments tell us?
The recent insider buying is encouraging. And longer-term insider trading also gives us confidence. Along with strong insider ownership, this analysis suggests that insiders are quite optimistic about Beijing Chunlizhengda Medical Instruments. One for the watchlist, at least! So these insider trades can help us build a thesis on the stock, but it’s also helpful to know the risks this company faces. To help you, we found 3 warning signs (1 is not too good for us!) that you should be aware of before buying shares of Beijing Chunlizhengda Medical Instruments.
Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting 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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