Wisdomcome Group Holdings Up 11%, But Some Insiders Miss Out

Despite the fact that Wisdomcome Group Holdings Limited (HKG:8079) stock rose 11% last week, insiders who sold HK$3.7m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of HK$0.60, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

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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The Last 12 Months Of Insider Transactions At Wisdomcome Group Holdings

Over the last year, we can see that the biggest insider purchase was by insider Tsz Hong Chan for HK$2.0m worth of shares, at about HK$0.49 per share. That implies that an insider found the current price of HK$0.51 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices. We note that Tsz Hong Chan was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 4.60m shares for HK$2.3m. But they sold 6.29m shares for HK$3.7m. Tsz Hong Chan divested 6.29m shares over the last 12 months at an average price of HK$0.60. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Wisdomcome Group Holdings

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Wisdomcome Group Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Wisdomcome Group Holdings. We can see that insider Tsz Hong Chan paid HK$2.0m for shares in the company. No-one sold. That shows some optimism about the company's future.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Wisdomcome Group Holdings insiders own about HK$7.2m worth of shares (which is 45% 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 Wisdomcome Group Holdings Insiders?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Wisdomcome Group Holdings. To that end, you should learn about the 2 warning signs we've spotted with Wisdomcome Group Holdings (including 1 which is significant).

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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.