Core Economy Investment Group Up 21%, Insider Buyers Are Up 72%

Insiders who bought Core Economy Investment Group Limited (HKG:339) stock in the last 12 months were richly rewarded last week. The company's market value increased by HK$17m as a result of the stock's 21% gain over the same period. As a result, their original purchase of HK$9.94m worth of stock is now worth HK$17.1m.

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.

See our latest analysis for Core Economy Investment Group

Core Economy Investment Group Insider Transactions Over The Last Year

The insider Wenjuan Zhu made the biggest insider purchase in the last 12 months. That single transaction was for HK$5.6m worth of shares at a price of HK$0.30 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.34. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 50.24m shares worth HK$9.9m. But they sold 57.00m shares for HK$8.0m. In the last twelve months there was more buying than selling by Core Economy Investment Group insiders. The average buy price was around HK$0.20. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Core Economy Investment 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.

Core Economy Investment Group Insiders Bought Stock Recently

It's good to see that Core Economy Investment Group insiders have made notable investments in the company's shares. We can see that insider Wenjuan Zhu paid HK$1.1m for shares in the company. No-one sold. That shows some optimism about the company's future.

Does Core Economy Investment Group Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Core Economy Investment Group insiders own 26% of the company, worth about HK$25m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Core Economy Investment Group Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Core Economy Investment Group shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Core Economy Investment Group. Our analysis shows 3 warning signs for Core Economy Investment Group (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

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 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