Insiders who purchased CN¥76.0m worth of China Lesso Group Holdings Limited (HKG:2128) shares over the past year recouped some of their losses after price gained 10% last week. However, total losses seen by insiders are still CN¥19m since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
China Lesso Group Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Founder & Executive Chairman Luen Hei Wong for HK$20m worth of shares, at about HK$5.30 per share. That means that even when the share price was higher than HK$3.28 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months China Lesso Group Holdings insiders were buying shares, but not selling. The average buy price was around HK$4.37. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Insiders At China Lesso Group Holdings Have Bought Stock Recently
It's good to see that China Lesso Group Holdings insiders have made notable investments in the company's shares. CEO & Executive Director Manlun Zuo spent HK$1.7m on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership Of China Lesso Group Holdings
For a common shareholder, it is worth checking how many shares are held by company 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 Lesso Group Holdings insiders own about HK$7.0b worth of shares (which is 69% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The China Lesso Group Holdings Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about China Lesso Group Holdings. One for the watchlist, at least! 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. Every company has risks, and we've spotted 2 warning signs for China Lesso Group Holdings you should know about.
Of course China Lesso Group 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.