Capital Realm Financial Holdings Group Insiders Land Bargain With Gains Of HK$49m

Insiders who purchased Capital Realm Financial Holdings Group Limited (HKG:204) shares in the past 12 months are unlikely to be deeply impacted by the stock's 10.0% decline over the past week. After accounting for the recent loss, the HK$110.3m worth of shares they purchased is now worth HK$159.8m, suggesting a good return on their investment.

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.

Check out our latest analysis for Capital Realm Financial Holdings Group

Capital Realm Financial Holdings Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Yun Lam Tse, for HK$48m worth of shares, at about HK$0.19 per share. That means that an insider was selling shares at slightly below the current price (HK$0.49). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 100% of Yun Lam Tse's holding.

Over the last year, we can see that insiders have bought 322.73m shares worth HK$110m. On the other hand they divested 313.09m shares, for HK$77m. In total, Capital Realm Financial Holdings Group insiders bought more than they sold over the last year. Their average price was about HK$0.34. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Capital Realm Financial Holdings Group 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.

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. Insiders own 35% of Capital Realm Financial Holdings Group shares, worth about HK$149m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Capital Realm Financial Holdings Group Insiders?

The fact that there have been no Capital Realm Financial Holdings Group insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Capital Realm Financial Holdings Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Capital Realm Financial Holdings Group. For instance, we've identified 4 warning signs for Capital Realm Financial Holdings Group (1 doesn't sit too well with us) you should be aware of.

But note: Capital Realm Financial Holdings Group 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.

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