Insider Stock Buying Of Ling Yui Holdings Delivers Return On HK$4.05m Investment

Insiders who bought Ling Yui Holdings Limited (HKG:784) stock lover the last 12 months are probably not as affected by last week’s 19% loss. After taking the recent loss into consideration, the HK$4.05m worth of stock they bought is now worth HK$6.58m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Ling Yui Holdings Insider Transactions Over The Last Year

The Chairman & GM Chi Fai Ling made the biggest insider purchase in the last 12 months. That single transaction was for HK$4.0m worth of shares at a price of HK$0.04 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.065. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Chi Fai Ling bought 101.22m shares over the last 12 months at an average price of HK$0.04. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Ling Yui Holdings

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Ling Yui Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Ling Yui Holdings insiders own 74% of the company, worth about HK$38m. 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 Ling Yui Holdings Insiders?

It doesn't really mean much that no insider has traded Ling Yui Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Ling Yui Holdings insiders feel good about the company's future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 3 warning signs for Ling Yui Holdings (2 are a bit concerning) you should be aware of.

But note: Ling Yui Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.