Good Fellow Healthcare Holdings' Recent Gains Improve Losses On Insider Purchases Worth HK$9.69m

Insiders who bought HK$9.69m worth of Good Fellow Healthcare Holdings Limited (HKG:8143) stock in the last year recovered part of their losses as the stock rose by 10.0% 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 HK$2.3m since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Good Fellow Healthcare Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Yong Shun Liu bought HK$9.7m worth of shares at a price of HK$0.086 per share. That means that even when the share price was higher than HK$0.066 (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. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Yong Shun Liu was the only individual insider to buy shares in the last twelve months.

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!

Check out our latest analysis for Good Fellow Healthcare Holdings

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.

Does Good Fellow Healthcare Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Good Fellow Healthcare Holdings insiders own about HK$51m worth of shares (which is 56% of the company). 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 Good Fellow Healthcare Holdings Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Good Fellow Healthcare Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. Be aware that Good Fellow Healthcare Holdings is showing 4 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

But note: Good Fellow Healthcare 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.