As Wealthking Investments Limited (HKG:1140) drops to HK$3.3b market cap, insiders might rethink their HK$2.1b stock purchase earlier this year

The recent 10% drop in Wealthking Investments Limited's (HKG:1140) stock could come as a blow to insiders who purchased HK$2.1b worth of stock at an average buy price of HK$0.89 over the past 12 months. 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 HK$803m, which is not great.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Wealthking Investments

Wealthking Investments Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Chairman Zhiwei Liu bought HK$1.4b worth of shares at a price of HK$0.92 per share. That means that even when the share price was higher than HK$0.34 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Wealthking Investments insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Wealthking Investments is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Wealthking Investments Insiders Bought Stock Recently

Over the last quarter, Wealthking Investments insiders have spent a meaningful amount on shares. We can see that CEO & Executive Chairman Zhiwei Liu paid HK$1.0m for shares in the company. No-one sold. That shows some optimism about the company's future.

Insider Ownership Of Wealthking Investments

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Wealthking Investments insiders own 63% of the company, worth about HK$2.1b. 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 Wealthking Investments Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Wealthking Investments. One for the watchlist, at least! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Wealthking Investments has 2 warning signs (and 1 which is concerning) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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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.