Daido Group Insider Buyers Net HK$6.1m Despite 11% Stock Decline

Insiders who bought Daido Group Limited (HKG:544) in the last 12 months may probably not pay attention to the stock's recent 11% drop. Reason being, despite the recent loss, insiders original purchase value of HK$2.35m is now worth HK$8.41m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Daido Group Insider Transactions Over The Last Year

The insider Yik Hoi Tsang made the biggest insider purchase in the last 12 months. That single transaction was for HK$971k worth of shares at a price of HK$0.48 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$1.72. 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.

In the last twelve months insiders purchased 4.89m shares for HK$2.3m. But they sold 1.93m shares for HK$93k. Overall, Daido Group insiders were net buyers during the last year. 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!

Check out our latest analysis for Daido Group

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Daido Group Insiders Bought Stock Recently

Over the last quarter, Daido Group insiders have spent a meaningful amount on shares. Specifically, insider Yik Hoi Tsang bought HK$971k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

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. Insiders own 28% of Daido Group shares, worth about HK$16m. 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 Daido Group Insiders?

It's certainly positive to see the recent insider purchase. 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. When combined with notable insider ownership, these factors suggest Daido Group 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. For instance, we've identified 4 warning signs for Daido Group (3 are concerning) you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.