Bullish Silkwave Insiders Loaded Up On US$14.9m Of Stock

Multiple insiders secured a larger position in Silkwave Inc (HKG:471) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Silkwave Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Zhuangzhu Yu, for HK$9.6m worth of shares, at about HK$1.60 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.58. So it may not tell us anything about how insiders feel about the current share price. Notably Zhuangzhu Yu was also the biggest buyer, having purchased HK$15m worth of shares.

In the last twelve months insiders purchased 24.06m shares for HK$15m. On the other hand they divested 9.01m shares, for HK$12m. In the last twelve months there was more buying than selling by Silkwave insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Silkwave

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).

Silkwave Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Silkwave. In total, insider lisu Wang sold HK$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. Silkwave insiders own about HK$41m worth of shares (which is 59% of the company). 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 Silkwave Insiders?

An insider sold stock recently, but they haven't been buying. On the other hand, the insider transactions over the last year are encouraging. And insider ownership remains quite considerable. So we're not too bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Silkwave (of which 2 are a bit concerning!) you should know about.

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.