Insiders Who Purchased CN¥18.0m Of Newlink Technology Stock May Not Have Expected 15% Tumble

The recent 15% drop in Newlink Technology Inc.'s (HKG:9600) stock could come as a blow to insiders who purchased CN¥18.0m worth of stock at an average buy price of CN¥0.30 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CN¥9.18m, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Newlink Technology Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Gou Yumei bought HK$18m worth of shares at a price of HK$0.30 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.15). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Gou Yumei was the only individual insider to buy shares in the last twelve months.

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 Newlink Technology

Newlink Technology 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.

Insider Ownership Of Newlink Technology

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. We usually like to see fairly high levels of insider ownership. Newlink Technology insiders own about HK$99m 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 Newlink Technology Insiders?

The fact that there have been no Newlink Technology insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Newlink Technology insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Newlink Technology. For example, Newlink Technology has 2 warning signs (and 1 which is a bit concerning) we think 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.