Bullish StarGlory Holdings Insider Buying Worth HK$20.0m Yet To Pay Off

The recent 13% drop in StarGlory Holdings Company Limited's (HKG:8213) stock could come as a blow to insiders who purchased HK$20.0m worth of stock at an average buy price of HK$0.35 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth HK$14.9m, which is not what they expected.

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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StarGlory Holdings Insider Transactions Over The Last Year

The insider Ting Fai Ng made the biggest insider purchase in the last 12 months. That single transaction was for HK$10.0m worth of shares at a price of HK$0.35 each. That means that an insider was happy to buy shares at above the current price of HK$0.26. 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 when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Ting Fai Ng was the only individual insider to buy during the last year.

Ting Fai Ng bought 57.14m shares over the last 12 months at an average price of HK$0.35. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for StarGlory 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).

Insiders At StarGlory Holdings Have Sold Stock Recently

The last three months saw some StarGlory Holdings insider selling. Independent Non-Executive Director Xiaoli Pang sold just HK$129k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.

Insider Ownership Of StarGlory Holdings

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. It's great to see that StarGlory Holdings insiders own 60% of the company, worth about HK$86m. 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 StarGlory Holdings Insiders?

An insider sold StarGlory Holdings shares recently, but they didn't buy any. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So we're not too bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing StarGlory Holdings. At Simply Wall St, we've found that StarGlory Holdings has 4 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.