Insiders' HK$8.63m Investments In Red Following Ever Harvest Group Holdings' HK$16m Dip In Market Value

The recent 10.0% drop in Ever Harvest Group Holdings Limited's (HKG:1549) stock could come as a blow to insiders who purchased HK$8.63m worth of stock at an average buy price of HK$0.12 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth HK$6.32m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Ever Harvest Group Holdings

The Last 12 Months Of Insider Transactions At Ever Harvest Group Holdings

The Executive Chairman Yu Leung Lau made the biggest insider purchase in the last 12 months. That single transaction was for HK$5.2m worth of shares at a price of HK$0.10 each. That means that an insider was happy to buy shares at above the current price of HK$0.09. 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 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 Yu Leung Lau.

Yu Leung Lau bought a total of 70.18m shares over the year at an average price of HK$0.12. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Ever Harvest Group Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Ever Harvest Group Holdings Boast High 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 Ever Harvest Group Holdings insiders own 73% of the company, worth about HK$101m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Ever Harvest Group Holdings Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Ever Harvest Group Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 3 warning signs for Ever Harvest Group Holdings that deserve your attention before buying any shares.

But note: Ever Harvest Group 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 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.