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Rong Zhang Just Bought 2.3% More Shares In China Information Technology Development Limited (HKG:8178)

Simply Wall St ·  07/01 06:30

Even if it's not a huge purchase, we think it was good to see that Rong Zhang, a China Information Technology Development Limited (HKG:8178) insider, recently shelled out HK$365k to buy stock, at HK$0.14 per share. Although the purchase is not a big one, increasing their shareholding by only 2.3%, it can be interpreted as a good sign.

See our latest analysis for China Information Technology Development

China Information Technology Development Insider Transactions Over The Last Year

Notably, that recent purchase by insider Rong Zhang was not the only time they bought China Information Technology Development shares this year. They previously made an even bigger purchase of HK$9.3m worth of shares at a price of HK$0.15 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.14). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While China Information Technology Development insiders bought shares during the last year, they didn't sell. The average buy price was around HK$0.17. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

SEHK:8178 Insider Trading Volume June 30th 2022

China Information Technology Development is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

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. It's great to see that China Information Technology Development insiders own 45% of the company, worth about HK$32m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At China Information Technology Development Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about China Information Technology Development. 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. Our analysis shows 3 warning signs for China Information Technology Development (2 are a bit concerning!) and we strongly recommend you look at them before investing .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

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