As Linklogis Inc.'s market cap (HKG:9959) drops to HK$16b, insiders might be questioning their decision to buy earlier this year

Insiders who bought CN¥15m worth of Linklogis Inc.'s (HKG:9959) stock at an average buy price of CN¥8.06 over the last year may be disappointed by the recent 4.2% decrease in the stock. 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 CN¥13m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Linklogis

The Last 12 Months Of Insider Transactions At Linklogis

The Chairman & CEO Song Qun made the biggest insider purchase in the last 12 months. That single transaction was for HK$7.5m worth of shares at a price of HK$12.50 each. That means that even when the share price was higher than HK$6.80 (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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Linklogis insiders bought shares during the last year, they didn't sell. They paid about HK$8.06 on average. These transactions suggest that insiders have considered the current price attractive. 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 growing companies that insiders are buying.

Insider Ownership of Linklogis

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Linklogis insiders own 15% of the company, currently worth about HK$2.3b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Linklogis Insider Transactions Indicate?

The fact that there have been no Linklogis insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Linklogis insiders think the business has merit. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Linklogis.

Of course Linklogis 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, but not derivative transactions.

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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.