Nasdaq
华尔街日报Insiders Give Up CN¥264k As MetaLight Stock Drops To HK$2.58
Insiders who bought CN¥547.7k worth of MetaLight Inc.'s (HKG:2605) stock at an average buy price of CN¥4.98 over the last year may be disappointed by the recent 12% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CN¥283.8k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At MetaLight
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Xiaoling Huang bought HK$528k worth of shares at a price of HK$4.98 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$2.58). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Xiaoling Huang was the only individual insider to buy shares in the last twelve months. Notably Xiaoling Huang was also the biggest seller.
Xiaoling Huang bought 110.00k shares over the last 12 months at an average price of HK$4.98. 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 MetaLight
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).
Insiders At MetaLight Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at MetaLight. Specifically, Independent Non-Executive Director Xiaoling Huang ditched HK$425k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of MetaLight
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 33% of MetaLight shares, worth about HK$130m. 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 MetaLight Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. And insider ownership remains quite considerable. So we're not too bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for MetaLight you should be aware of.
But note: MetaLight 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.