Potential Greater China Financial Holdings Limited (HKG:431) shareholders may wish to note that the Executive Chairman, Kequan Liu, recently bought HK$1.9m worth of stock, paying HK$0.13 for each share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
See our latest analysis for Greater China Financial Holdings
Greater China Financial Holdings Insider Transactions Over The Last Year
Notably, that recent purchase by Executive Chairman Kequan Liu was not the only time they bought Greater China Financial Holdings shares this year. They previously made an even bigger purchase of HK$2.8m worth of shares at a price of HK$0.14 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.13). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Greater China Financial Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. Greater China Financial Holdings insiders own 48% of the company, currently worth about HK$479m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Greater China Financial Holdings Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Greater China Financial Holdings. That's what I like to see! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Greater China Financial Holdings has 2 warning signs we think you should be aware of.
But note: Greater China Financial 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.
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.