Zhongzhi Pharmaceutical Holdings Limited (HKG:3737) shareholders (or potential shareholders) will be happy to see that the Chairman, Zhi Tian Lai, recently bought a whopping HK$6.0m worth of stock, at a price of HK$1.20. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 1.0%.
The Last 12 Months Of Insider Transactions At Zhongzhi Pharmaceutical Holdings
Notably, that recent purchase by Zhi Tian Lai is the biggest insider purchase of Zhongzhi Pharmaceutical Holdings shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of HK$1.22. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Zhongzhi Pharmaceutical Holdings insider decided to buy shares at close to current prices. Zhi Tian Lai was the only individual insider to buy during the last year.
Zhi Tian Lai bought a total of 29.87m shares over the year at an average price of HK$1.21. 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!
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).
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Zhongzhi Pharmaceutical Holdings insiders own 66% of the company, worth about HK$694m. 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 Zhongzhi Pharmaceutical Holdings Insiders?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Zhongzhi Pharmaceutical Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zhongzhi Pharmaceutical Holdings. For example, Zhongzhi Pharmaceutical Holdings has 2 warning signs (and 1 which is concerning) we think you should know about.
Of course Zhongzhi Pharmaceutical Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.