Stock Analysis

Insiders made the right call by buying HK$265m Man Wah Holdings Limited (HKG:1999) stock this year, currently sit on HK$10m profit

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Man Wah Holdings Limited (HKG:1999) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 4.7% decline in the stock price. Reason being, despite the recent loss, insiders original purchase value of HK$265m is now worth HK$275m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Man Wah Holdings

Man Wah Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman Man Li Wong for HK$33m worth of shares, at about HK$6.67 per share. That implies that an insider found the current price of HK$7.15 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. Man Li Wong was the only individual insider to buy during the last year.

Man Li Wong bought 38.45m shares over the last 12 months at an average price of HK$6.89. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

SEHK:1999 Insider Trading Volume March 17th 2023

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 Man Wah 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. It's great to see that Man Wah Holdings insiders own 61% of the company, worth about HK$17b. 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 Does This Data Suggest About Man Wah Holdings Insiders?

It doesn't really mean much that no insider has traded Man Wah Holdings 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 Man Wah Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Man Wah Holdings.

Of course Man Wah Holdings 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.

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