Insiders Re-Evaluate Their HK$6.70m Stock Purchase As CASH Financial Services Group Falls To HK$89m

The recent 12% drop in CASH Financial Services Group Limited's (HKG:510) stock could come as a blow to insiders who purchased HK$6.70m worth of stock at an average buy price of HK$0.24 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only HK$5.73m.

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.

View our latest analysis for CASH Financial Services Group

The Last 12 Months Of Insider Transactions At CASH Financial Services Group

Notably, that recent purchase by Executive Chairman & CEO Pak Hoo Kwan was not the only time they bought CASH Financial Services Group shares this year. Earlier in the year, they paid HK$0.24 per share in a HK$4.9m purchase. That means that even when the share price was higher than HK$0.21 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While CASH Financial Services Group insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. 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.

CASH Financial Services Group Insiders Bought Stock Recently

Over the last quarter, CASH Financial Services Group insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought HK$6.7m worth of shares. This makes one think the business has some good points.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that CASH Financial Services Group insiders own 5.8% of the company, worth about HK$5.2m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At CASH Financial Services Group Tell Us?

The recent insider purchases are heartening. 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. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that CASH Financial Services Group insiders are reasonably well aligned, and optimistic for the future. 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. Every company has risks, and we've spotted 3 warning signs for CASH Financial Services Group you should know about.

Of course CASH Financial Services Group 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.

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