Insiders See HK$8.08m Investment In Century Entertainment International Holdings Jump Last Week

Century Entertainment International Holdings Limited (HKG:959) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 82%, resulting in a HK$22m rise in the company's market capitalisation, translating to a gain of 67% on their initial investment. As a result, the stock they originally bought for HK$8.08m is now worth HK$13.5m.

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 Century Entertainment International Holdings

Century Entertainment International Holdings Insider Transactions Over The Last Year

Notably, that recent purchase by Tsz Ying Ho is the biggest insider purchase of Century Entertainment International Holdings shares that we've seen in the last year. Even though the purchase was made at a significantly lower price than the recent price (HK$0.38), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Century Entertainment International Holdings Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Century Entertainment International Holdings insiders own 49% of the company, currently worth about HK$23m based on the recent share price. 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 Century Entertainment International Holdings Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Century Entertainment International Holdings insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 5 warning signs for Century Entertainment International Holdings and we suggest you have a look.

But note: Century Entertainment 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.