Insiders Who Purchased S$61.2m Of Optima Automobile Group Holdings Stock May Not Have Expected 25% Tumble

Insiders who acquired S$61.2m worth of Optima Automobile Group Holdings Limited's (HKG:8418) stock at an average price of S$0.91 in the past 12 months may be dismayed by the recent 25% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only S$28.8m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Optima Automobile Group Holdings

Optima Automobile Group Holdings Insider Transactions Over The Last Year

The Executive Chairman of the Board Wu’an Hu made the biggest insider purchase in the last 12 months. That single transaction was for HK$44m worth of shares at a price of HK$0.90 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.43). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 66.98m shares worth HK$61m. But they sold 12.85m shares for HK$5.8m. Overall, Optima Automobile Group Holdings insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Insiders At Optima Automobile Group Holdings Have Sold Stock Recently

The last three months saw significant insider selling at Optima Automobile Group Holdings. In total, insider Soo Hoon Chong dumped HK$5.8m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Optima Automobile Group Holdings insiders own about HK$88m worth of shares. That equates to 19% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Optima Automobile Group Holdings Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. It's good to see insiders are shareholders. So we're not overly bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we've spotted with Optima Automobile Group Holdings (including 1 which is significant).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.