Insiders Of New City Development Group Are Up 45% On Their HK$13.9m Purchase
New City Development Group Limited (HKG:456) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 39% resulting in a HK$39m addition to the company’s market value. As a result, their original purchase of HK$13.9m worth of stock is now worth HK$20.1m.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At New City Development Group
The Executive Chairman & CEO Junran Han made the biggest insider purchase in the last 12 months. That single transaction was for HK$14m worth of shares at a price of HK$0.44 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.64. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for New City Development Group
New City Development Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
New City Development Group Insiders Are Selling The Stock
The last quarter saw substantial insider selling of New City Development Group shares. In total, Executive Chairman & CEO Junran Han sold HK$8.0m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does New City Development Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. New City Development Group insiders own 50% of the company, currently worth about HK$69m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About New City Development Group Insiders?
An insider sold New City Development Group shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. We are also comforted by the high levels of insider ownership. So we're happy to look past recent trading. 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. For example, New City Development Group has 5 warning signs (and 3 which are a bit concerning) we think you should know about.
Of course New City Development 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.
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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.