ISP Holdings Gains 43%, Insider Trades Reap Benefit

Last week, ISP Holdings Limited (HKG:2340) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 43% last week, resulting in a HK$47m increase in the company's market worth, implying a 44% gain on their initial purchase. In other words, the original HK$2.28m purchase is now worth HK$3.29m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At ISP Holdings

Notably, that recent purchase by Tin Lung Chong is the biggest insider purchase of ISP Holdings shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.20. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Tin Lung Chong bought a total of 16.26m shares over the year at an average price of HK$0.14. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for ISP 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.

Insider Ownership

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. ISP Holdings insiders own 54% of the company, currently worth about HK$84m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About ISP Holdings Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about ISP Holdings. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for ISP Holdings you should know about.

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.

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