The recent price decline of 12% in Kindstar Global (Beijing) Technology, Inc.'s (HKG:9960) stock may have disappointed insiders who bought CN¥2.0m worth of shares at an average price of CN¥4.65 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CN¥1.4m, which is not great.
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.
The Last 12 Months Of Insider Transactions At Kindstar Global (Beijing) Technology
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Zuie-Chin Huang for HK$731k worth of shares, at about HK$4.48 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$3.16). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Zuie-Chin Huang.
Zuie-Chin Huang bought 440.00k shares over the last 12 months at an average price of HK$4.65. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 growing companies that insiders are buying.
Does Kindstar Global (Beijing) Technology 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 appears that Kindstar Global (Beijing) Technology insiders own 15% of the company, worth about HK$481m. 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 Kindstar Global (Beijing) Technology Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Kindstar Global (Beijing) Technology insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kindstar Global (Beijing) Technology. Be aware that Kindstar Global (Beijing) Technology is showing 2 warning signs in our investment analysis, and 1 of those is significant...
But note: Kindstar Global (Beijing) Technology 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, but not derivative transactions.
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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.