Wisdomcome Group Holdings Drops To HK$0.35, Yet Insiders May Have Sold Too Early

Despite the fact that Wisdomcome Group Holdings Limited's (HKG:8079) value has dropped 13% in the last week insiders who sold HK$3.7m worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of HK$0.40 is still lower than the current share price.

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.

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The Last 12 Months Of Insider Transactions At Wisdomcome Group Holdings

The insider Tsz Hong Chan made the biggest insider purchase in the last 12 months. That single transaction was for HK$3.6m worth of shares at a price of HK$0.40 each. That means that an insider was happy to buy shares at above the current price of HK$0.35. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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. Tsz Hong Chan was the only individual insider to buy during the last year.

All up, insiders sold more shares in Wisdomcome Group Holdings than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Wisdomcome Group Holdings

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Does Wisdomcome Group 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. Wisdomcome Group Holdings insiders own 51% of the company, currently worth about HK$5.5m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Wisdomcome Group Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Wisdomcome Group Holdings shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Wisdomcome Group Holdings insider transactions don't fill us with confidence. While it's good to be aware of 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. When we did our research, we found 3 warning signs for Wisdomcome Group Holdings (2 shouldn't be ignored!) that we believe deserve your full attention.

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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.