Whilst it may not be a huge deal, we thought it was good to see that the Nanjing Sinolife United Company Limited (HKG:3332) Executive Chairman, Pinghu Gui, recently bought HK$364k worth of stock, for HK$0.15 per share. That purchase might not be huge but it did increase their holding by 16%.
See our latest analysis for Nanjing Sinolife United
Nanjing Sinolife United Insider Transactions Over The Last Year
Notably, that recent purchase by Pinghu Gui is the biggest insider purchase of Nanjing Sinolife United shares that we've seen in the last year. That means that even when the share price was higher than HK$0.14 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Pinghu Gui.
Pinghu Gui bought 7.01m shares over the last 12 months at an average price of HK$0.15. 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!
Nanjing Sinolife United is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Nanjing Sinolife United insiders own about HK$98m worth of shares (which is 73% of the company). 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 Nanjing Sinolife United Tell Us?
It's certainly positive to see the recent insider purchase. 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Nanjing Sinolife United. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Nanjing Sinolife United (1 is significant!) and we strongly recommend you look at these before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.