Insiders may rethink their HK$50m investment in BC Technology Group Limited (HKG:863) now that the company has lost HK$267m in value
Insiders who acquired for 50 million HK dollars BC Technology Group Limited (HKG:863) at the average price of HK$5.52 over the past 12 months might be dismayed by the recent price drop of 17%. This is not good because insiders invest based on expectations that their money will appreciate over time. However, following recent losses, their initial investment is now worth only HK$28 million.
While insider trading isn’t the most important thing when it comes to long-term investing, we think it makes perfect sense to keep tabs on what insiders are doing.
See our latest analysis for BC Technology Group
The last 12 months of insider trading at BC Technology Group
Over the past year, we can see that the biggest insider buy was made by insider Hoi Po Yuen for HK$50 million worth of shares, at around HK$5.50 per share. Clearly, an insider wanted to buy, even at a price above the current share price (ie HK$3.04). Their perspective may have changed since then, but it at least shows that they were feeling optimistic at the time. We always take careful note of the price paid by insiders when buying stocks. Generally speaking, it comes to our attention when insiders have bought stocks at higher prices than they are now, as it suggests that they thought the stock was worth buying, even at a higher price.
In the last year, we can see that insiders bought 9.06 million shares worth HK$50 million. But insiders sold 9.00 million shares worth HK$50 million. Overall, BC Technology Group insiders have been net buyers over the past year. The chart below shows insider trading (by companies and individuals) over the past year. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
BC Technology Group isn’t the only insider stock buying. So take a look at this free list of growing companies with insider buying.
BC Technology Group Insider Ownership
Many investors like to check how much a company is owned by insiders. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the business for the long term. It appears that BC Technology Group insiders own 9.5% of the company, which is worth around HK$123 million. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.
What could insider trading at BC Technology Group tell us?
The fact that there hasn’t been any BC Technology Group insider trading recently certainly doesn’t bother us. However, our analysis of transactions over the past year is encouraging. With strong insider ownership and encouraging transactions, it appears BC Technology Group insiders think the company has some merit. So these insider trades can help us build a thesis on the stock, but it’s also helpful to know the risks this company faces. For example, BC Technology Group has 2 warning signs (and 1 that can’t be ignored) that we think you should know about.
Sure BC Technology Group may not be the best stock to buy. So you might want to see this free set of high quality companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.