UMP Healthcare Holdings Slides As Insider Purchases Lose Another HK$394k

The recent 13% drop in UMP Healthcare Holdings Limited's (HKG:722) stock could come as a blow to insiders who purchased HK$2.63m worth of stock at an average buy price of HK$0.54 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$2.23m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for UMP Healthcare Holdings

UMP Healthcare Holdings Insider Transactions Over The Last Year

The Executive Chairman Yiu Kwong Sun made the biggest insider purchase in the last 12 months. That single transaction was for HK$450k worth of shares at a price of HK$0.45 each. That means that an insider was happy to buy shares at around the current price of HK$0.46. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for UMP Healthcare Holdings share holders is that insiders were buying at near the current price.

While UMP Healthcare Holdings insiders bought shares during the last year, they didn't sell. Their average price was about HK$0.54. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

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.

Insiders At UMP Healthcare Holdings Have Bought Stock Recently

There was some insider buying at UMP Healthcare Holdings over the last quarter. Insiders shelled out HK$229k for shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

Does UMP Healthcare Holdings Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that UMP Healthcare Holdings insiders own 42% of the company, worth about HK$152m. 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 Do The UMP Healthcare Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest UMP Healthcare Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. Case in point: We've spotted 4 warning signs for UMP Healthcare Holdings you should be aware of.

But note: UMP Healthcare Holdings 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.

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

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