Zhongsheng Group Holdings Limited (HKG:881) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 18%, resulting in a HK$15b rise in the company's market capitalisation. As a result, the stock they originally bought for CN¥15m is now worth CN¥18m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Zhongsheng Group Holdings

The Last 12 Months Of Insider Transactions At Zhongsheng Group Holdings

In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Chairman Yi Huang bought HK$10m worth of shares at a price of HK$31.50 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$41.95), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Zhongsheng Group Holdings insiders may have bought shares in the last year, but they didn't sell any. Their average price was about HK$34.93. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Zhongsheng Group Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Zhongsheng Group Holdings. Co-Founder & Chairman Yi Huang spent HK$10m on stock, and there wasn't any selling. That shows some optimism about the company's future.

Does Zhongsheng Group Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Zhongsheng Group Holdings insiders own 42% of the company, currently worth about HK$42b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Zhongsheng Group Holdings Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Zhongsheng Group Holdings. One for the watchlist, at least! Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Zhongsheng Group Holdings.

Of course Zhongsheng Group Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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, but not derivative transactions.

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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.