Those who follow with Limited Chinese literature (HKG: 772) will no doubt be intrigued by the recent share purchase by Huayi Cao, the non-executive director of the company, who spent HK $ 24million on shares at an average price of HK $ 48.37. It is undeniable that a purchase of this magnitude suggests conviction for a better future, although we note that proportionately this only increased their stake by 1.4%.
See our latest analysis for Chinese literature
The Last 12 Months of Insider Trading at China Literature
In the past twelve months, the biggest sale by an insider was when insider Wenhui Wu sold HK $ 115 million of shares at a price of HK $ 57.64 per share. This means that an insider was selling shares around the current price of HK $ 53.10. We usually don’t like to see insider sales, but the lower the selling price, the more it concerns us. Considering the sale took place around current prices, this makes us a little cautious but is not a major concern.
In total, insiders sold more shares of China Literature than they bought in the past year. The chart below shows insider trading (by businesses and individuals) over the past year. If you click on the chart, you can see all of the individual trades including the stock price, individual and date!
If you like to buy stocks that insiders buy rather than sell, then you might love this free list of companies. (Hint: insiders bought them).
Does Chinese Literature Boast Strong Insider Ownership?
For an ordinary shareholder, it is worth checking out how many shares are owned by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the business for the long term. China Literature insiders own 3.5% of the company, currently worth around HK $ 1.9 billion based on the recent share price. I like to see this level of insider ownership because it increases the chances that management is thinking in the best interests of shareholders.
What might insider trading tell us in Chinese literature?
The recent insider buying is encouraging. Longer-term transactions are not so encouraging, however. The recent insider buying, along with the strong insider ownership, suggests that Chinese literature insiders are quite aligned and optimistic. Sure, the future is what matters most. So if you are interested in Chinese literature, you should check out this free analyst forecast report for the company.
If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, which have a HIGH return on equity and low leverage.
For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.