Insider Buying: The Impro Precision Industries Limited (HKG:1286) Executive Chairman & CEO Just Bought HK$670k Worth Of Shares

By
Simply Wall St
Published
July 03, 2021
SEHK:1286
Source: Shutterstock

Whilst it may not be a huge deal, we thought it was good to see that the Impro Precision Industries Limited (HKG:1286) Executive Chairman & CEO, Ruibo Lu, recently bought HK$670k worth of stock, for HK$2.45 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

See our latest analysis for Impro Precision Industries

Impro Precision Industries Insider Transactions Over The Last Year

Notably, that recent purchase by Ruibo Lu is the biggest insider purchase of Impro Precision Industries shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of HK$2.40. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Ruibo Lu.

Ruibo Lu purchased 455.00k shares over the year. The average price per share was HK$2.43. 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!

insider-trading-volume
SEHK:1286 Insider Trading Volume July 4th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Impro Precision Industries

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. Impro Precision Industries insiders own 61% of the company, currently worth about HK$2.8b based on the recent share price. 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 Impro Precision Industries Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Impro Precision Industries. That's what I like to see! 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 example - Impro Precision Industries has 1 warning sign we think you should be aware of.

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, but not derivative transactions.

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