Stock Analysis

Have Insiders Been Buying Neo Telemedia Limited (HKG:8167) Shares This Year?

SEHK:8167
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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Neo Telemedia Limited (HKG:8167), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Neo Telemedia

The Last 12 Months Of Insider Transactions At Neo Telemedia

Over the last year, we can see that the biggest insider purchase was by insider Wai Ping Yan for HK$418k worth of shares, at about HK$0.082 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.19), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Neo Telemedia insiders bought shares during the last year, they didn't sell. Their average price was about HK$0.13. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
SEHK:8167 Insider Trading Volume March 18th 2021

Neo Telemedia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Neo Telemedia Insiders Bought Stock Recently

There was some insider buying at Neo Telemedia over the last quarter. Executive Chairman Haiquan Lie shelled out HK$346k for shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

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. It's great to see that Neo Telemedia insiders own 51% of the company, worth about HK$944m. 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 Neo Telemedia Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Neo Telemedia. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Neo Telemedia. Case in point: We've spotted 2 warning signs for Neo Telemedia you should be aware of.

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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