Insiders who bought CN¥5.13m worth of Cosmo Lady (China) Holdings Company Limited (HKG:2298) stock in the last year recovered part of their losses as the stock rose by 12% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at CN¥1.6m since the time of purchase.
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.
The Last 12 Months Of Insider Transactions At Cosmo Lady (China) Holdings
Over the last year, we can see that the biggest insider purchase was by Deputy Chairman & VP Shengfeng Zhang for HK$711k worth of shares, at about HK$0.35 per share. That means that an insider was happy to buy shares at above the current price of HK$0.26. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Cosmo Lady (China) Holdings insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Cosmo Lady (China) Holdings
Cosmo Lady (China) Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 17% of Cosmo Lady (China) Holdings shares, worth about HK$98m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Cosmo Lady (China) Holdings Tell Us?
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. Insiders do have a stake in Cosmo Lady (China) Holdings and their transactions don't cause us concern. 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. At Simply Wall St, we found 2 warning signs for Cosmo Lady (China) Holdings that deserve your attention before buying any shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.