Wai Chun Group Holdings Insiders Land Bargain With Gains Of HK$13m

Insiders who purchased Wai Chun Group Holdings Limited (HKG:1013) shares in the past 12 months are unlikely to be deeply impacted by the stock's 15% decline over the past week. Reason being, despite the recent loss, insiders original purchase value of HK$7.59m is now worth HK$20.9m.

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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Wai Chun Group Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Guanyu Chen for HK$5.9m worth of shares, at about HK$0.30 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.79. 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.

Guanyu Chen purchased 26.46m shares over the year. The average price per share was HK$0.29. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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 Wai Chun Group Holdings

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.

Wai Chun Group Holdings Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Wai Chun Group Holdings, over the last three months. insider Guanyu Chen spent HK$6.9m on stock. On the other hand, insider Guanyu Chen netted HK$1.1m by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Does Wai Chun Group Holdings Boast High 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. It's great to see that Wai Chun Group Holdings insiders own 83% of the company, worth about HK$176m. 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 Do The Wai Chun Group Holdings Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives 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 Wai Chun Group Holdings. Nice! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 3 warning signs for Wai Chun Group Holdings (2 are a bit concerning!) and we strongly recommend you look at them before investing.

But note: Wai Chun Group 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.