Bullish Hing Ming Holdings Insiders Rewarded As Their Investment Rises To HK$6.86m

Hing Ming Holdings Limited (HKG:8425) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a HK$2.3m rise in the company's market capitalisation, translating to a gain of 40% on their initial investment. Put another way, the original HK$4.90m acquisition is now worth HK$6.86m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Hing Ming Holdings

Hing Ming Holdings Insider Transactions Over The Last Year

The Compliance Officer & Executive Director Ming Hei Tang made the biggest insider purchase in the last 12 months. That single transaction was for HK$3.2m worth of shares at a price of HK$0.04 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.056. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Ming Hei Tang purchased 122.57m shares over the year. The average price per share was HK$0.04. 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!

Hing Ming Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Hing Ming Holdings Insiders Bought Stock Recently

At Hing Ming Holdings,over the last quarter, we have observed quite a lot more insider buying than insider selling. Compliance Officer & Executive Director Ming Hei Tang spent HK$4.9m on stock. But we did see insider Yu Leung Lee sell shares worth HK$3.2m. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Hing Ming Holdings insiders own 39% of the company, worth about HK$8.2m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Hing Ming Holdings Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Hing Ming Holdings shares, given these transactions (along with notable insider ownership of the company). 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 assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Hing Ming Holdings.

But note: Hing Ming Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.