Jimu Group Insiders Enjoying HK$4.7m Appreciation On HK$16.0m Investment
Insiders who bought Jimu Group Limited (HKG:8187) stock in the last 12 months were richly rewarded last week. The company's market value increased by HK$9.1m as a result of the stock's 11% gain over the same period. In other words, the original HK$16.0m purchase is now worth HK$20.7m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Jimu Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Ngai Fung Chow for HK$8.7m worth of shares, at about HK$0.40 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.60. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 34.56m shares for HK$16m. But they sold 20.98m shares for HK$11m. In the last twelve months there was more buying than selling by Jimu Group insiders. The average buy price was around HK$0.46. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for Jimu Group
Jimu Group is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At Jimu Group Have Bought Stock Recently
At Jimu Group,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, Executive Director Yiyuan Huang bought HK$946k worth of shares in that time. But CEO & Executive Director Ngai Fung Chow sold shares worth HK$386k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership Of Jimu Group
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 31% of Jimu Group shares, worth about HK$28m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Jimu Group Tell Us?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Jimu Group shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Jimu Group (1 is a bit unpleasant) you should be aware of.
Of course Jimu Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.