Favorable turn of events for New Horizon Health Limited (HKG:6606) insiders who've lost CN¥3.4m to date on a CN¥128m purchase

By
Simply Wall St
Published
February 23, 2022
SEHK:6606
Source: Shutterstock

Insiders who bought CN¥128m worth of New Horizon Health Limited (HKG:6606) stock in the last year have seen some of their losses recouped as the stock gained 19% last week. However, total losses seen by insiders are still CN¥3.4m but in since the time of purchase.

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.

See our latest analysis for New Horizon Health

The Last 12 Months Of Insider Transactions At New Horizon Health

In the last twelve months, the biggest single purchase by an insider was when insider Siu Hang Mak bought HK$99m worth of shares at a price of HK$31.15 per share. That means that even when the share price was higher than HK$29.65 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Siu Hang Mak.

Siu Hang Mak bought 4.21m shares over the last 12 months at an average price of HK$30.45. 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!

insider-trading-volume
SEHK:6606 Insider Trading Volume February 23rd 2022

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

Insider Ownership of New Horizon Health

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. New Horizon Health insiders own 21% of the company, currently worth about HK$2.4b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About New Horizon Health Insiders?

The fact that there have been no New Horizon Health insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like New Horizon Health insiders think the business has merit. 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. For example - New Horizon Health has 3 warning signs we think you should be aware of.

Of course New Horizon Health 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.