Insiders who acquired CN¥10.7m worth of APT Electronics Co., Ltd.'s (HKG:2551) stock at an average price of CN¥2.59 in the past 12 months may be dismayed by the recent 13% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥6.94m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
APT Electronics Insider Transactions Over The Last Year
The Chief Strategic Officer & Executive Chairman of the Board Guowei Xiao made the biggest insider purchase in the last 12 months. That single transaction was for HK$733k worth of shares at a price of HK$3.01 each. That means that even when the share price was higher than HK$1.68 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.
In the last twelve months insiders purchased 4.13m shares for HK$11m. But they sold 6.00k shares for HK$18k. In the last twelve months there was more buying than selling by APT Electronics insiders. Their average price was about HK$2.59. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for APT Electronics
APT Electronics is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
APT Electronics Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at APT Electronics. In total, insiders bought HK$5.0m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Based on our data, APT Electronics insiders have about 1.7% of the stock, worth approximately HK$16m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.
So What Do The APT Electronics Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Insiders likely see value in APT Electronics shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 2 warning signs we've spotted with APT Electronics (including 1 which doesn't sit too well with us).
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 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.