Bullish Ri Ying Holdings Insider Buying Worth HK$276.0m Yet To Pay Off

The recent price decline of 13% in Ri Ying Holdings Limited's (HKG:1741) stock may have disappointed insiders who bought HK$276.0m worth of shares at an average price of HK$1.10 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth HK$176.4m, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Ri Ying Holdings

Ri Ying Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Director Wei Sun bought HK$192m worth of shares at a price of HK$1.00 per share. That means that an insider was happy to buy shares at above the current price of HK$0.70. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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. We note that Wei Sun was both the biggest buyer and the biggest seller.

Over the last year, we can see that insiders have bought 252.00m shares worth HK$276m. But they sold 72.36m shares for HK$101m. In the last twelve months there was more buying than selling by Ri Ying Holdings insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Ri Ying Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Ri Ying Holdings insiders own 23% of the company, worth about HK$128m. 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 Ri Ying Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Ri Ying Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Ri Ying Holdings insiders think the business has merit. 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. To help with this, we've discovered 3 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Ri Ying Holdings.

Of course Ri Ying Holdings 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.

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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.