Trade Alert: Kwok Kei Tai At Sandmartin International Holdings Limited (HKG:482), Has Just Spent HK$6.0m Buying 100% More Shares

Sandmartin International Holdings Limited (HKG:482) shareholders (or potential shareholders) will be happy to see that insider Kwok Kei Tai recently bought a whopping HK$6.0m worth of stock, at a price of HK$0.06. That increased their holding by a full 100%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

View our latest analysis for Sandmartin International Holdings

Sandmartin International Holdings Insider Transactions Over The Last Year

Notably, that recent purchase by Kwok Kei Tai is the biggest insider purchase of Sandmartin International Holdings shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of HK$0.035. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Kwok Kei Tai.

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!

Sandmartin International Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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. We usually like to see fairly high levels of insider ownership. Insiders own 17% of Sandmartin International Holdings shares, worth about HK$19m. 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 Sandmartin International Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Sandmartin International Holdings insiders are well aligned, and that they may think the share price is too low. 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 Sandmartin International Holdings is showing 4 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...

But note: Sandmartin International Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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