Hopeful Week For Insiders Who Bought HK$42.4m Of Bonjour Holdings Stock

Insiders who bought HK$42.4m worth of Bonjour Holdings Limited (HKG:653) stock in the last year have seen some of their losses recouped as the stock gained 12% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling HK$11m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, 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 Bonjour Holdings

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board Jianwen Chen bought HK$33m worth of shares at a price of HK$0.16 per share. That means that an insider was happy to buy shares at above the current price of HK$0.12. 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.

Happily, we note that in the last year insiders paid HK$42m for 265.78m shares. But insiders sold 174.77m shares worth HK$36m. In the last twelve months there was more buying than selling by Bonjour Holdings insiders. 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!

See our latest analysis for Bonjour Holdings

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Bonjour Holdings insiders own 54% of the company, worth about HK$29m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Bonjour Holdings Insiders?

It doesn't really mean much that no insider has traded Bonjour Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Bonjour Holdings insiders feel good about the company's future. 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. You'd be interested to know, that we found 2 warning signs for Bonjour Holdings and we suggest you have a look.

But note: Bonjour 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.