Insiders who bought Zhongyu Energy Holdings Limited (HKG:3633) in the last 12 months may probably not pay attention to the stock's recent 3.2% drop. After taking the recent loss into consideration, the HK$1.3b worth of stock they bought is now worth HK$1.5b, indicating that their investment yielded a positive return.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Zhongyu Energy Holdings
Zhongyu Energy Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Vice Chairman Chi Shing Yiu bought HK$1.1b worth of shares at a price of HK$5.80 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$6.70), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders purchased 224.23m shares for HK$1.3b. But they sold 6.61m shares for HK$47m. In the last twelve months there was more buying than selling by Zhongyu Energy Holdings insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!SEHK:3633 Insider Trading Volume May 19th 2022
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).
Zhongyu Energy Holdings Insiders Bought Stock Recently
It's good to see that Zhongyu Energy Holdings insiders have made notable investments in the company's shares. We can see that Executive Chairman of the Board Wenliang Wang paid HK$7.0m for shares in the company. No-one sold. That shows some optimism about the company's future.
Does Zhongyu Energy Holdings Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Zhongyu Energy Holdings insiders own 36% of the company, currently worth about HK$6.8b 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.
So What Do The Zhongyu Energy Holdings Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Zhongyu Energy Holdings. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Zhongyu Energy Holdings.
But note: Zhongyu Energy Holdings 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, 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.