Insider Buyers At Lvji Technology Holdings Recover Some Losses, But Still Down CN¥155k

Insiders who bought CN¥1.47m worth of Lvji Technology Holdings Inc. (HKG:1745) stock in the last year recovered part of their losses as the stock rose by 20% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CN¥155k.

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.

View our latest analysis for Lvji Technology Holdings

The Last 12 Months Of Insider Transactions At Lvji Technology Holdings

In the last twelve months, the biggest single purchase by an insider was when Founder & Executive Chairman of the Board Weizhong Zang bought HK$1.5m worth of shares at a price of HK$0.50 per share. That means that even when the share price was higher than HK$0.45 (the recent price), an insider wanted to purchase shares. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Weizhong Zang was the only individual insider to buy during the last year.

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.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 29% of Lvji Technology Holdings shares, worth about HK$211m. 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 Lvji Technology Holdings Insider Transactions Indicate?

The fact that there have been no Lvji Technology Holdings insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Lvji Technology Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. To that end, you should learn about the 3 warning signs we've spotted with Lvji Technology Holdings (including 1 which is significant).

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.

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.