Non-Executive Director of Gemdale Properties and Investment Picks Up 72% More Stock

Potential Gemdale Properties and Investment Corporation Limited (HKG:535) shareholders may wish to note that the Non-Executive Director, Lian Huat Loh, recently bought HK$1.4m worth of stock, paying HK$0.16 for each share. We reckon that's a good sign, especially since the purchase boosted their holding by 72%.

See our latest analysis for Gemdale Properties and Investment

Gemdale Properties and Investment Insider Transactions Over The Last Year

In fact, the recent purchase by Non-Executive Director Lian Huat Loh was not their only acquisition of Gemdale Properties and Investment shares this year. Earlier in the year, they paid HK$0.26 per share in a HK$2.6m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.16). 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. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Gemdale Properties and Investment insiders were buying shares, but not selling. They paid about HK$0.22 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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.

Insider Ownership Of Gemdale Properties and Investment

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Gemdale Properties and Investment insiders own 3.3% of the company, worth about HK$85m. 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 Do The Gemdale Properties and Investment Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Gemdale Properties and Investment we think they are probably pretty confident of a bright future. While it's good to be aware of 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. For example - Gemdale Properties and Investment has 2 warning signs we think you should be aware of.

But note: Gemdale Properties and Investment 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.