Should You Take Comfort From Insider Transactions At Oriental Payment Group Holdings Limited (HKG:8613)?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Oriental Payment Group Holdings Limited (HKG:8613).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Oriental Payment Group Holdings

Oriental Payment Group Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Xiaochun Sui for HK$2.0m worth of shares, at about HK$0.082 per share. That means that an insider was happy to buy shares at around the current price of HK$0.091. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Oriental Payment Group Holdings insider decided to buy shares at close to current prices. Xiaochun Sui was the only individual insider to buy shares in the last twelve months.

Xiaochun Sui bought a total of 52.32m shares over the year at an average price of HK$0.082. 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 growing companies that insiders are buying.

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. We usually like to see fairly high levels of insider ownership. Insiders own 31% of Oriental Payment Group Holdings shares, worth about HK$28m. 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 Oriental Payment Group Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Oriental Payment Group Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Oriental Payment Group Holdings insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Oriental Payment Group Holdings is showing 3 warning signs in our investment analysis, and 2 of those are a bit unpleasant...

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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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