Kafelaku Coffee Holding Insiders Placed Bullish Bets Worth HK$28.5m

Quite a few insiders have dramatically grown their holdings in Kafelaku Coffee Holding Limited (HKG:1869) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Kafelaku Coffee Holding Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Zhiqiang Cui bought HK$23m worth of shares at a price of HK$0.088 per share. That implies that an insider found the current price of HK$0.095 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Kafelaku Coffee Holding insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Kafelaku Coffee Holding

Kafelaku Coffee Holding is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Kafelaku Coffee Holding Insiders Bought Stock Recently

It's good to see that Kafelaku Coffee Holding insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought HK$29m worth of shares. That shows some optimism about the company's future.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 36% of Kafelaku Coffee Holding shares, worth about HK$49m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Kafelaku Coffee Holding Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Kafelaku Coffee Holding shares, given these transactions (along with notable insider ownership of the company). 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. For example, Kafelaku Coffee Holding has 2 warning signs (and 1 which is significant) we think you should know about.

Of course Kafelaku Coffee Holding 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 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.