Changyou International Group Insider Confidence Rewarded, Stock Hits HK$100m Market Cap

Changyou International Group Limited (HKG:1039) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10.0%, resulting in a HK$9.1m rise in the company's market capitalisation, translating to a gain of 18% on their initial investment. In other words, the original CN¥1.96m purchase is now worth CN¥2.32m.

Although we don't think shareholders should simply follow insider transactions, 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 Changyou International Group

In the last twelve months, the biggest single purchase by an insider was when insider Tang Pun bought HK$1.7m worth of shares at a price of HK$0.047 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.055. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Changyou International Group insiders may have bought shares in the last year, but they didn't sell any. 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!

Check out our latest analysis for Changyou International Group

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

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Changyou International Group insiders own about HK$53m worth of shares (which is 53% 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.

What Might The Insider Transactions At Changyou International Group Tell Us?

The fact that there have been no Changyou International Group insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Changyou International Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. When we did our research, we found 2 warning signs for Changyou International Group (1 is potentially serious!) that we believe deserve your full attention.

Of course Changyou International Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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.