Wenye Group Holdings' Market Cap Drops To HK$51m Leaving Insiders With Losses

Insiders who acquired CN¥30.0m worth of Wenye Group Holdings Limited's (HKG:1802) stock at an average price of CN¥0.20 in the past 12 months may be dismayed by the recent 20% price decline. 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 CN¥12.9m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Wenye Group Holdings

Wenye Group Holdings Insider Transactions Over The Last Year

Notably, that recent sale by insider Pak San Li was not the only time they traded Wenye Group Holdings shares this year. They previously purchased HK$30m worth of shares at a price of HK$0.20 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.086). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Pak San Li was the only individual insider to buy shares in the last twelve months. We note that Pak San Li was also the biggest seller.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Wenye Group Holdings Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Wenye Group Holdings. Specifically, insider Pak San Li ditched HK$13m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Wenye Group Holdings

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Wenye Group Holdings insiders own 65% of the company, currently worth about HK$33m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Wenye Group Holdings Insiders?

An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. And insider ownership remains quite considerable. So we're not too bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Wenye Group Holdings has 4 warning signs we think you should be aware of.

Of course Wenye Group 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.