Reversal Of Fortune For CIMG Insiders Who Made A US$6.04m Purchase

Insiders who bought US$6.04m worth of CIMG Inc. (NASDAQ:IMG) stock in the last year recovered part of their losses as the stock rose by 15% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$4.1m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At CIMG

The insider Yumei Liu made the biggest insider purchase in the last 12 months. That single transaction was for US$1.6m worth of shares at a price of US$0.52 each. That means that even when the share price was higher than US$0.17 (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. In our view, the price an insider pays for shares is very important. 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.

While CIMG insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for CIMG

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of CIMG

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. CIMG insiders own 84% of the company, currently worth about US$26m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About CIMG Insiders?

The fact that there have been no CIMG insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like CIMG insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CIMG. Case in point: We've spotted 4 warning signs for CIMG you should be aware of, and 2 of them are potentially serious.

But note: CIMG 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.