Trade Alert: The Co-Founder Of IGG Inc (HKG:799), Zongjian Cai, Has Just Spent US$15m Buying A Few More Shares

IGG Inc (HKG:799) shareholders (or potential shareholders) will be happy to see that the Co-Founder, Zongjian Cai, recently bought a whopping HK$15m worth of stock, at a price of HK$7.34. While that only increased their holding size by 1.0%, it is still a big swing by our standards.

See our latest analysis for IGG

IGG Insider Transactions Over The Last Year

Notably, that recent purchase by Zongjian Cai is the biggest insider purchase of IGG shares that we've seen in the last year. That implies that an insider found the current price of HK$8.01 per share to be enticing. 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. 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 IGG share holders is that an insider was buying at near the current price. Zongjian Cai was the only individual insider to buy shares in the last twelve months.

Zongjian Cai bought a total of 2.81m shares over the year at an average price of HK$7.46. 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of IGG

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. IGG insiders own 34% of the company, currently worth about HK$3.4b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About IGG Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest IGG insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing IGG. For example, IGG has 3 warning signs (and 2 which are potentially serious) we think you should know about.

Of course IGG 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.

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This article by Simply Wall St is general in nature. 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.
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