Trade Alert: Wan Lee At Lee & Man Paper Manufacturing Limited (HKG:2314), Has Just Spent HK$5.0m Buying A Small Number of Shares

Simply Wall St
May 11, 2022
Source: Shutterstock

Lee & Man Paper Manufacturing Limited (HKG:2314) shareholders (or potential shareholders) will be happy to see that insider Wan Lee recently bought a whopping HK$5.0m worth of stock, at a price of HK$3.60. While that only increased their holding size by 0.3%, it is still a big swing by our standards.

View our latest analysis for Lee & Man Paper Manufacturing

The Last 12 Months Of Insider Transactions At Lee & Man Paper Manufacturing

Notably, that recent purchase by insider Wan Lee was not the only time they bought Lee & Man Paper Manufacturing shares this year. They previously made an even bigger purchase of HK$22m worth of shares at a price of HK$5.52 per share. That means that even when the share price was higher than HK$3.67 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Wan Lee was the only individual insider to buy shares in the last twelve months.

Wan Lee purchased 15.83m shares over the year. The average price per share was HK$5.17. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

SEHK:2314 Insider Trading Volume May 11th 2022

Lee & Man Paper Manufacturing is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. Lee & Man Paper Manufacturing insiders own 73% of the company, currently worth about HK$12b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Lee & Man Paper Manufacturing Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Lee & Man Paper Manufacturing insiders are well aligned, and quite possibly think the share price is too low. Nice! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 2 warning signs for Lee & Man Paper Manufacturing and we suggest you have a look.

But note: Lee & Man Paper Manufacturing 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.

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.