Insider Stock Buying Of Synertone Communication Delivers Return On HK$32.0m Investment

Insiders who bought Synertone Communication Corporation (HKG:1613) stock lover the last 12 months are probably not as affected by last week’s 12% loss. After accounting for the recent loss, the HK$32.0m worth of shares they purchased is now worth HK$146.7m, suggesting a good return on their investment.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Synertone Communication

The insider Mianfeng Li made the biggest insider purchase in the last 12 months. That single transaction was for HK$32m worth of shares at a price of HK$0.11 each. Even though the purchase was made at a significantly lower price than the recent price (HK$0.49), we still think insider buying is a positive. 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.

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 Synertone Communication

Synertone Communication is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Synertone Communication Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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. It's great to see that Synertone Communication insiders own 66% of the company, worth about HK$175m. 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 Synertone Communication Insiders?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Synertone Communication insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Synertone Communication. Be aware that Synertone Communication is showing 3 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.