Hopeful Week For Insiders Who Bought HK$34.9m Of Kai Yuan Holdings Stock
Insiders who bought HK$34.9m worth of Kai Yuan Holdings Limited (HKG:1215) stock in the last year recovered part of their losses as the stock rose by 11% last week. However, total losses seen by insiders are still HK$6.7m since the time of purchase.
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.
The Last 12 Months Of Insider Transactions At Kai Yuan Holdings
In the last twelve months, the biggest single purchase by an insider was when insider Guangyao Mo bought HK$35m worth of shares at a price of HK$0.026 per share. That means that an insider was happy to buy shares at above the current price of HK$0.021. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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. Guangyao Mo was the only individual insider to buy shares in the last twelve months.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for Kai Yuan Holdings
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Kai Yuan Holdings insiders own 37% of the company, worth about HK$100m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Kai Yuan Holdings Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Kai Yuan Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Kai Yuan Holdings and their transactions don't cause us concern. 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. While conducting our analysis, we found that Kai Yuan Holdings has 1 warning sign and it would be unwise to ignore it.
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.