Yangtzekiang Garment Insider Confidence Rewarded, Stock Hits HK$238m Market Cap
Yangtzekiang Garment Limited (HKG:294) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a HK$25m rise in the company's market capitalisation, translating to a gain of 24% on their initial investment. As a result, the stock they originally bought for HK$595.2k is now worth HK$736.0k.
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.
Yangtzekiang Garment Insider Transactions Over The Last Year
The Chairman of the Board Wing Fui Chan made the biggest insider purchase in the last 12 months. That single transaction was for HK$595k worth of shares at a price of HK$0.93 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$1.15. 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.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Yangtzekiang Garment
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
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. Yangtzekiang Garment insiders own about HK$68m worth of shares. That equates to 29% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Yangtzekiang Garment Tell Us?
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. Insiders do have a stake in Yangtzekiang Garment and their transactions don't cause us concern. 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 3 warning signs for Yangtzekiang Garment (of which 2 are a bit concerning!) 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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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.