Bullish Lapco Holdings Insiders Rewarded As Their Investment Rises To HK$26.9m

Lapco Holdings Limited (HKG:8472) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 17% resulting in a HK$11m addition to the company’s market value. Put another way, the original HK$19.6m acquisition is now worth HK$26.9m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Lapco Holdings

Lapco Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Wai Tong Tam bought HK$11m worth of shares at a price of HK$0.60 per share. We do like to see buying, but this purchase was made at well below the current price of HK$0.74. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Lapco Holdings insiders may have bought shares in the last year, but they didn't sell any. They paid about HK$0.54 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

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

Lapco Holdings Insiders Bought Stock Recently

Over the last quarter, Lapco Holdings insiders have spent a meaningful amount on shares. In total, insiders bought HK$20m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Does Lapco Holdings Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Lapco Holdings insiders own 50% of the company, currently worth about HK$35m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Lapco Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Lapco Holdings. Looks promising! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for Lapco Holdings you should know about.

But note: Lapco 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.