Investors who take an interest in China Shenghai Group Limited (HKG:1676) should definitely note that insider Liqiong Yang recently paid HK$1.83 per share to buy HK$1.5m worth of the stock. That's a very solid buy in our book, and increased their holding by a noteworthy 13%.

See our latest analysis for China Shenghai Group

China Shenghai Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Shek Yau Lau, for HK$6.6m worth of shares, at about HK$1.65 per share. That means that an insider was selling shares at slightly below the current price (HK$1.83). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 50% of Shek Yau Lau's holding. The only individual insider seller over the last year was Shek Yau Lau.

Happily, we note that in the last year insiders paid HK$4.8m for 2.63m shares. But they sold 4.00m shares for HK$6.6m. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does China Shenghai Group Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. China Shenghai Group insiders own about HK$115m worth of shares (which is 52% 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.

So What Does This Data Suggest About China Shenghai Group Insiders?

The insider sales have outweighed the insider buying, at China Shenghai Group, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Shenghai Group. To help with this, we've discovered 4 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in China Shenghai Group.

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.