Insider Buyers At Elegance Optical International Holdings Sitting On HK$13m Profit

Insiders who bought Elegance Optical International Holdings Limited (HKG:907) stock lover the last 12 months are probably not as affected by last week’s 22% loss. Reason being, despite the recent loss, insiders original purchase value of HK$21.6m is now worth HK$34.3m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Elegance Optical International Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Guohua Zhu for HK$15m worth of shares, at about HK$0.059 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.094), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 365.20m shares for HK$22m. On the other hand they divested 142.30m shares, for HK$8.5m. Overall, Elegance Optical International Holdings insiders were net buyers during the last year. 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!

View our latest analysis for Elegance Optical International Holdings

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).

Insider Ownership Of Elegance Optical International Holdings

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. It's great to see that Elegance Optical International Holdings insiders own 47% of the company, worth about HK$39m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Elegance Optical International Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Elegance Optical International 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 Elegance Optical International Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for Elegance Optical International Holdings (2 are concerning) you should be aware of.

But note: Elegance Optical International 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.

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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.