Madison Holdings Group Up 18%, Insiders Still In The Red By HK$3.8m

Insiders who bought HK$7.29m worth of Madison Holdings Group Limited (HKG:8057) stock in the last year recovered part of their losses as the stock rose by 18% 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$3.8m 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Madison Holdings Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Lunlun Zou for HK$7.3m worth of shares, at about HK$0.49 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.23). 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Lunlun Zou 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!

View our latest analysis for Madison Holdings Group

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 28% of Madison Holdings Group shares, worth about HK$10m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Madison Holdings Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Madison Holdings Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Madison Holdings Group and we see no evidence to suggest they are worried about 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. When we did our research, we found 4 warning signs for Madison Holdings Group (3 are significant!) that we believe deserve your full attention.

Of course Madison Holdings Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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.