Insider Stock Buying Of ATA Creativity Global Delivers Return On CN¥5.14m Investment
Insiders who bought ATA Creativity Global (NASDAQ:AACG) stock lover the last 12 months are probably not as affected by last week’s 24% loss. Even after accounting for the recent loss, the CN¥5.14m worth of stock purchased by them is now worth CN¥6.23m or in other words, their investment continues to give good returns.
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.
ATA Creativity Global Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Xue Fenglan bought US$3.4m worth of shares at a price of US$0.80 per share. That means that even when the share price was higher than US$0.73 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While ATA Creativity Global insiders bought shares during the last year, they didn't sell. The average buy price was around US$0.60. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. 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 ATA Creativity Global
ATA Creativity Global 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
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 26% of ATA Creativity Global shares, worth about US$12m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At ATA Creativity Global Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in ATA Creativity Global and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ATA Creativity Global. To help with this, we've discovered 4 warning signs (2 are a bit concerning!) that you ought to be aware of before buying any shares in ATA Creativity Global.
But note: ATA Creativity Global 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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