New City Development Group Insider Buyers Pleased With HK$1.6m Return On Investment

New City Development Group Limited (HKG:456) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 11% decline in the stock price. After taking the recent loss into consideration, the HK$6.82m worth of stock they bought is now worth HK$8.40m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for New City Development Group

The Last 12 Months Of Insider Transactions At New City Development Group

The insider Jiakang Wang made the biggest insider purchase in the last 12 months. That single transaction was for HK$6.8m worth of shares at a price of HK$0.32 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.40. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

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 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.

Does New City Development Group Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. New City Development Group insiders own about HK$38m worth of shares (which is 69% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The New City Development Group Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about New City Development Group. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing New City Development Group. Be aware that New City Development Group is showing 4 warning signs in our investment analysis, and 2 of those don't sit too well with us...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.