Recent gains in AAC Technologies Holdings Inc. (HKG:2018) help add back some value on insider purchases worth CN¥103m, still down CN¥44m

Insiders who bought CN¥103m worth of AAC Technologies Holdings Inc. (HKG:2018) stock in the last year recovered part of their losses as the stock rose by 11% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at CN¥44m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for AAC Technologies Holdings

The Last 12 Months Of Insider Transactions At AAC Technologies Holdings

The Co-Founder Zhengmin Pan made the biggest insider purchase in the last 12 months. That single transaction was for HK$33m worth of shares at a price of HK$32.91 each. That means that even when the share price was higher than HK$19.16 (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. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months AAC Technologies Holdings insiders were buying shares, but not selling. 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!

AAC Technologies Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at AAC Technologies Holdings Have Bought Stock Recently

Over the last quarter, AAC Technologies Holdings insiders have spent a meaningful amount on shares. Specifically, Executive Director Joe Kuen Mok bought HK$2.1m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership of AAC Technologies Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that AAC Technologies Holdings insiders own 44% of the company, worth about HK$10b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At AAC Technologies Holdings Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest AAC Technologies Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for AAC Technologies Holdings that deserve your attention before buying any shares.

Of course AAC Technologies Holdings 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.