Beisen Holding's Market Cap Drops To HK$3.3b Leaving Insiders With Losses

The recent 14% drop in Beisen Holding Limited's (HKG:9669) stock could come as a blow to insiders who purchased CN¥44.8m worth of stock at an average buy price of CN¥5.59 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth CN¥38.4m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Beisen Holding Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Hong Jing for HK$41m worth of shares, at about HK$5.80 per share. That means that even when the share price was higher than HK$4.78 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 8.02m shares for HK$45m. But they sold 616.46k shares for HK$2.7m. In total, Beisen Holding insiders bought more than they sold over 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!

View our latest analysis for Beisen Holding

Beisen Holding is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Beisen Holding Have Bought Stock Recently

Over the last quarter, Beisen Holding insiders have spent a meaningful amount on shares. We can see that insider Hong Jing paid HK$41m for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Beisen Holding

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. Beisen Holding insiders own about HK$1.1b worth of shares (which is 34% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Beisen Holding Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Beisen Holding insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Beisen Holding .

Of course Beisen Holding may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.