Insider Buyers At OSL Group Sitting On HK$898m Profit

Insiders who bought OSL Group Limited (HKG:863) stock lover the last 12 months are probably not as affected by last week’s 14% loss. After taking the recent loss into consideration, the HK$962.4m worth of stock they bought is now worth HK$1.86b, indicating that their investment yielded a positive return.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for OSL Group

OSL Group Insider Transactions Over The Last Year

The insider Shuai Liu made the biggest insider purchase in the last 12 months. That single transaction was for HK$713m worth of shares at a price of HK$3.80 each. We do like to see buying, but this purchase was made at well below the current price of HK$8.60. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Over the last year, we can see that insiders have bought 216.35m shares worth HK$962m. On the other hand they divested 5.35m shares, for HK$34m. Overall, OSL Group insiders were net buyers during the last year. The average buy price was around HK$4.45. It is certainly positive to see 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

OSL Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

OSL Group Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at OSL Group, over the last three months. insider Heung Wing Leung spent HK$249m on stock. But we did see insider Heung Wing Leung sell shares worth HK$34m. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership Of OSL Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. OSL Group insiders own about HK$1.9b worth of shares (which is 34% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The OSL Group Insider Transactions Indicate?

It is good to see the recent insider purchase. 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. When combined with notable insider ownership, these factors suggest OSL Group insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. To that end, you should learn about the 3 warning signs we've spotted with OSL Group (including 1 which is a bit unpleasant).

Of course OSL 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.