Stock Analysis

In spite of Leoch International Technology Limited's recent pullback, insiders still gained about CN¥2.5m after buying earlier this year.

Source: Shutterstock

Leoch International Technology Limited (HKG:842) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 14% decline in the stock price. After accounting for the recent loss, the CN¥1.2m worth of shares they purchased is now worth CN¥3.7m, suggesting a good return on their investment.

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.

See our latest analysis for Leoch International Technology

The Last 12 Months Of Insider Transactions At Leoch International Technology

Over the last year, we can see that the biggest insider purchase was by Founder & Chairman Li Dong for HK$1.2m worth of shares, at about HK$0.58 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$1.83. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Li Dong bought a total of 2.04m shares over the year at an average price of HK$0.58. 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!

SEHK:842 Insider Trading Volume March 14th 2023

Leoch International Technology is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Leoch International Technology insiders own about HK$1.9b worth of shares (which is 74% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Leoch International Technology Tell Us?

It doesn't really mean much that no insider has traded Leoch International Technology shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Leoch International Technology 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. Case in point: We've spotted 1 warning sign for Leoch International Technology you should be aware of.

Of course Leoch International Technology 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, but not derivative transactions.

Valuation is complex, but we're helping make it simple.

Find out whether Leoch International Technology is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis