Unity Enterprise Holdings' Market Cap Drops To HK$63m Leaving Insiders With Losses

The recent 16% drop in Unity Enterprise Holdings Limited's (HKG:2195) stock could come as a blow to insiders who purchased HK$26.0m worth of stock at an average buy price of HK$0.60 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only HK$17.7m.

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.

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The Last 12 Months Of Insider Transactions At Unity Enterprise Holdings

The insider Chung Chor Yau made the biggest insider purchase in the last 12 months. That single transaction was for HK$13m worth of shares at a price of HK$0.57 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.41). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Chung Chor Yau was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 43.25m shares for HK$26m. On the other hand they divested 19.76m shares, for HK$13m. In total, Unity Enterprise Holdings insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Unity Enterprise Holdings

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Insider Ownership

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. We usually like to see fairly high levels of insider ownership. Unity Enterprise Holdings insiders own 62% of the company, currently worth about HK$40m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Unity Enterprise Holdings Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Unity Enterprise Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. At Simply Wall St, we've found that Unity Enterprise Holdings has 4 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

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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.