Insider Buyers At Narnia (Hong Kong) Group Likely Disappointed With 11% Slide

Insiders who acquired CN¥18.2m worth of Narnia (Hong Kong) Group Company Limited's (HKG:8607) stock at an average price of CN¥0.26 in the past 12 months may be dismayed by the recent 11% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CN¥3.43m, which is not great.

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.

See our latest analysis for Narnia (Hong Kong) Group

The Last 12 Months Of Insider Transactions At Narnia (Hong Kong) Group

The Executive Director Yiu Wah Yeung made the biggest insider purchase in the last 12 months. That single transaction was for HK$18m worth of shares at a price of HK$0.26 each. That means that even when the share price was higher than HK$0.049 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Yiu Wah Yeung was the only individual insider to buy shares in the last twelve months.

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!

Narnia (Hong Kong) Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Narnia (Hong Kong) Group Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Narnia (Hong Kong) Group. In total, insiders sold HK$10m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Narnia (Hong Kong) Group insiders have about 4.0% of the stock, worth approximately HK$1.6m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About Narnia (Hong Kong) Group Insiders?

Insiders sold stock recently, but they haven't been buying. But we take heart from prior transactions. Still, insiders don't own a great deal of the stock. So overall it's hard to argue insiders are bullish. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Narnia (Hong Kong) Group is showing 4 warning signs in our investment analysis, and 3 of those can't be ignored...

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.