As WMCH Global Investment Limited's market cap (HKG:8208) drops to HK$63m, insiders might be questioning their decision to buy earlier this year

By
Simply Wall St
Published
December 21, 2021
SEHK:8208
Source: Shutterstock

Insiders who bought S$22m worth of WMCH Global Investment Limited's (HKG:8208) stock at an average buy price of S$0.18 over the last year may be disappointed by the recent 11% decrease in the stock. 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 S$11m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for WMCH Global Investment

WMCH Global Investment Insider Transactions Over The Last Year

The insider Yu Fung Lau made the biggest insider purchase in the last 12 months. That single transaction was for HK$22m worth of shares at a price of HK$0.18 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.088). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While WMCH Global Investment insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
SEHK:8208 Insider Trading Volume December 21st 2021

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does WMCH Global Investment Boast High 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. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about HK$62k worth of WMCH Global Investment shares. However, it's possible that insiders might have an indirect interest through a more complex structure. This level of insider ownership is notably low, and not very encouraging.

So What Does This Data Suggest About WMCH Global Investment Insiders?

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. The transactions are fine but it'd be more encouraging if WMCH Global Investment insiders bought more shares in 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. Case in point: We've spotted 4 warning signs for WMCH Global Investment you should be aware of, and 2 of them are concerning.

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, but not derivative transactions.

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