Lai Sun Garment (International) Up 12%, Insider Buyers Are Up 28%

Lai Sun Garment (International) Limited (HKG:191) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a HK$62m addition to the company’s market value. Put another way, the original HK$8.47m acquisition is now worth HK$10.8m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Lai Sun Garment (International) Insider Transactions Over The Last Year

The Chairman Kin Ngok Lam made the biggest insider purchase in the last 12 months. That single transaction was for HK$8.5m worth of shares at a price of HK$0.50 each. Even though the purchase was made at a significantly lower price than the recent price (HK$0.64), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

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!

See our latest analysis for Lai Sun Garment (International)

Lai Sun Garment (International) is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Lai Sun Garment (International) Boast High Insider Ownership?

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. It's great to see that Lai Sun Garment (International) insiders own 68% of the company, worth about HK$386m. 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 Lai Sun Garment (International) Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Lai Sun Garment (International) insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lai Sun Garment (International). Every company has risks, and we've spotted 2 warning signs for Lai Sun Garment (International) (of which 1 is a bit concerning!) you should know about.

But note: Lai Sun Garment (International) 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.

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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.