As the market cap of WMCH Global Investment Limited (HKG: 8208) drops to HK $ 63 million, insiders may question their decision to buy earlier this year
Insiders who bought S $ 22 million from WMCH Global Investment Limited (HKG: 8208) at an average buy price of S $ 0.18 over the past year may be disappointed with the stock’s recent 11% drop. This is not good, as insiders invest based on the expectation that their money will appreciate over time. However, due to recent losses, their initial investment is now worth only S $ 11 million.
While insider trading is not the most important thing when it comes to investing for the long term, we would consider it foolish to ignore insider trading altogether.
Check out our latest review for WMCH Global Investment
WMCH Global Investment Insider Transactions in the Past Year
Insider Yu Fung Lau made the biggest insider buy in the past 12 months. This single transaction involved shares valued at HK $ 22 million priced at HK $ 0.18 each. So it’s clear that an insider wanted to buy, even at a price higher than the current share price (i.e. HK $ 0.088). It is very possible that they regret the purchase, but it is more likely that they are optimistic about the business. For us, it’s very important to consider the price that insiders pay for stocks. It is generally more encouraging if they paid above the current price, as it suggests that they have seen value, even at higher levels.
While WMCH Global Investment insiders bought stocks over the past year, they didn’t sell. You can see insider trading (by companies and individuals) over the past year represented in the graph below. If you want to know exactly who sold, for how much and when, just click on the graph below!
There are many other companies in which insiders buy shares. You probably do not want to miss it free list of growing companies that insiders buy.
Does WMCH Global Investment pride itself on high insider participation?
Looking at the total insider stakes in a company can help you determine if they are aligned with common shareholders. We generally like to see fairly high levels of insider ownership. From what we can see from our data, insiders only own around HK $ 62,000 of WMCH Global Investment shares. However, it is possible that insiders will have an indirect interest through a more complex structure. This level of insider ownership is particularly low and not very encouraging.
So what does this data suggest about WMCH Global Investment Insiders?
There haven’t been any insider trading in the past three months, that doesn’t mean much. On a more positive note, the transactions of the past year are encouraging. The deals are going well, but it would be more encouraging if the insiders of WMCH Global Investment bought more shares of the company. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. Concrete example: we have spotted 4 warning signs for WMCH Global Investment you need to be aware, and 2 of them are of concern.
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For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.