Insider Stock Buyers At MicroTech Medical (Hangzhou) Recouped Some Losses This Week

Insiders who bought CN¥1.83m worth of MicroTech Medical (Hangzhou) Co., Ltd. (HKG:2235) stock in the last year recovered part of their losses as the stock rose by 12% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CN¥419k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for MicroTech Medical (Hangzhou)

MicroTech Medical (Hangzhou) Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman & CEO Pan Zheng bought HK$1.0m worth of shares at a price of HK$6.87 per share. That means that an insider was happy to buy shares at above the current price of HK$5.23. 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. 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.

MicroTech Medical (Hangzhou) insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

MicroTech Medical (Hangzhou) 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.

Are MicroTech Medical (Hangzhou) Insiders Buying Or Selling?

There was only a small bit of insider buying, worth HK$10k, in the last three months. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 26% of MicroTech Medical (Hangzhou) shares, worth about HK$568m. 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 MicroTech Medical (Hangzhou) Insiders?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, MicroTech Medical (Hangzhou) insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that MicroTech Medical (Hangzhou) has 1 warning sign and it would be unwise to ignore it.

But note: MicroTech Medical (Hangzhou) 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.