BGMC International Decline Means Insider Profits Down To RM1.1m

Insiders who bought BGMC International Limited (HKG:1693) in the last 12 months may probably not pay attention to the stock's recent 11% drop. Reason being, despite the recent loss, insiders original purchase value of RM926.4k is now worth RM2.05m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At BGMC International

The insider Guohua Zhou made the biggest insider purchase in the last 12 months. That single transaction was for HK$926k worth of shares at a price of HK$1.20 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$2.66. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for BGMC International

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

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. BGMC International insiders own about HK$73m 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 BGMC International Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about BGMC International. 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. Be aware that BGMC International is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning...

But note: BGMC International 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.