Insiders Who Purchased HK$9.05m Of Coolpoint Innonism Holding Stock May Not Have Expected 16% Tumble

The recent 16% drop in Coolpoint Innonism Holding Limited's (HKG:8040) stock could come as a blow to insiders who purchased HK$9.05m worth of stock at an average buy price of HK$0.55 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth HK$5.30m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Coolpoint Innonism Holding

Over the last year, we can see that the biggest insider purchase was by insider Yi-Sung Chen for HK$9.0m worth of shares, at about HK$0.55 per share. That means that an insider was happy to buy shares at above the current price of HK$0.32. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 16.55m shares worth HK$9.1m. On the other hand they divested 155.00k shares, for HK$75k. Overall, Coolpoint Innonism Holding insiders were net buyers during the last year. 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!

View our latest analysis for Coolpoint Innonism Holding

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Insiders At Coolpoint Innonism Holding Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Coolpoint Innonism Holding. Insiders shelled out HK$90k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 25% of Coolpoint Innonism Holding shares, worth about HK$28m. 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 Does This Data Suggest About Coolpoint Innonism Holding Insiders?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Coolpoint Innonism Holding insiders are well aligned, and that they may think the share price is too low. 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 Coolpoint Innonism Holding has 3 warning signs (2 can't be ignored!) 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.