Reversal Of Fortune For Heng Tai Consumables Group Insiders Who Made A HK$20.9m Purchase

Some of the losses seen by insiders who purchased HK$20.9m worth of Heng Tai Consumables Group Limited (HKG:197) shares over the past year were recovered after the stock increased by 13% over the past week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at HK$4.4m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Heng Tai Consumables Group Insider Transactions Over The Last Year

The Chairman, Kwok Hing Lam, made the biggest insider sale in the last 12 months. That single transaction was for HK$15m worth of shares at a price of HK$0.48 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.32. So it is hard to draw any strong conclusion from it. Notably Kwok Hing Lam was also the biggest buyer, having purchased HK$21m worth of shares.

In the last twelve months insiders purchased 52.21m shares for HK$21m. But they sold 34.76m shares for HK$16m. Overall, Heng Tai Consumables Group insiders were net buyers during the last year. The average buy price was around HK$0.40. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Heng Tai Consumables Group

Heng Tai Consumables Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Heng Tai Consumables Group Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Heng Tai Consumables Group, over the last three months. In total, insider Ka Yung Hui bought HK$6.3m worth of shares in that time. But insider Ka Yung Hui sold shares worth HK$990k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Heng Tai Consumables Group Boast High Insider Ownership?

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. Heng Tai Consumables Group insiders own 45% of the company, currently worth about HK$30m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Heng Tai Consumables Group Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Heng Tai Consumables Group. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Heng Tai Consumables Group. For instance, we've identified 2 warning signs for Heng Tai Consumables Group (1 doesn't sit too well with us) you should be aware of.

But note: Heng Tai Consumables Group 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.