Insiders should re-evaluate their CN¥189 million share purchase as Country Garden Services Holdings Company Limited (HKG:6098) falls to HK$39 billion


Insiders who raised CN¥189 million Country Garden Services Holdings Company Limited (HKG:6098) Stocks with an average price of CN¥34.31 over the last 12 months may be dismayed by the recent 7.5% drop. Insiders buy in the hope that their investments will appreciate in value over time. However, due to recent losses, their initial investment is now only worth CN¥64 million, which is not great.

While we don’t believe that shareholders should simply track insider transactions, we would think it foolish to ignore insider transactions entirely.

Our analysis indicates this 6098 is potentially undervalued!

Country Garden Services Holdings insider transactions over the past year

Non-executive chairman Huiyan Yang made the largest insider purchase in the past 12 months. This single transaction involved HK$128 million worth of shares at a price of HK$30.30 each. That means one insider was happy to buy shares above the current price of HK$11.56. It is very likely that they will regret the purchase, but they are more likely to be optimistic about the company. We always pay close attention to the price that insiders pay when buying shares. In general, we are more positive about a stock when insiders have bought shares at shares bought above the current price, as this suggests they viewed the stock as valuable even at a higher price.

Over the last year, we can see insiders bought 5.51 million shares worth HK$189 million. But insiders sold 1.33 million shares worth HK$69 million. Country Garden Services Holdings insiders have bought more than they have sold in the last 12 months. The average purchase price was HK$34.31. These transactions suggest that insiders viewed the current price as attractive. Below is a visual representation of insider transactions (both corporate and individual) over the past 12 months. If you click on the chart you will see all the individual transactions including the stock price, the individual and the date!

SEHK:6098 insider trading volume as of October 10, 2022

Country Garden Services Holdings isn’t the only stock insiders are buying. For those who like to find win investments This free List of growing companies with recent insider purchases might be just the ticket.

Country Garden Services Holdings insiders recently bought shares

Over the past three months, we’ve seen significant insider buying at Country Garden Services Holdings. Not only were there no sales that we can see, but they bought HK$128 million worth of shares together. This is positive in our book as it implies some trust.

Insider ownership of Country Garden Services Holdings

Looking at the total number of insider holdings in a company can help inform your opinion of whether they are well aligned with common shareholders. We usually like to see a fairly high level of inside ownership. Country Garden Services Holdings insiders own approximately HK$17 billion worth of stock (that’s 44% of the company). I like to see this level of insider ownership because it increases the likelihood that management has the best interests of shareholders in mind.

What could the insider transactions at Country Garden Services Holdings tell us?

It’s good to see recent purchases. And the longer-term insider deals also give us confidence. Given the high level of insider ownership, it certainly seems like insiders are positive about Country Garden Services Holdings. I like to see that! So these insider transactions can help us build a thesis about the stock, but it’s also worth understanding the risks this company faces. Our analysis shows 2 Country Garden Services Holdings warning signs (1 is a bit awkward!) and we strongly encourage you to check them out before investing.

But beware: Country Garden Services Holdings might not be the best stock to buy. So check this out free List of interesting companies with high ROE and low leverage.

For the purposes of this article, insiders are individuals who report their transactions to the relevant regulator. We currently account for open market transactions and private dispositions, but not derivatives transactions.

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

The assessment is complex, but we help to simplify it.

find out if Country Garden Services Holdings may be over or under priced by reviewing our comprehensive analysis which includes the following Fair Value Estimates, Risks and Warnings, Dividends, Insider Trading and Financial Health.

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