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The Executive Director of Playmates Toys Limited (HKG:869), Bing Kin Cheng, Just Bought 11% More Shares

Simply Wall St

Even if it's not a huge purchase, we think it was good to see that Bing Kin Cheng, the Executive Director of Playmates Toys Limited (HKG:869) recently shelled out HK$65k to buy stock, at HK$0.33 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 11%.

Check out our latest analysis for Playmates Toys

The Last 12 Months Of Insider Transactions At Playmates Toys

Notably, that recent purchase by Bing Kin Cheng is the biggest insider purchase of Playmates Toys shares that we've seen in the last year. That means that even when the share price was higher than HK$0.32 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Bing Kin Cheng.

The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

SEHK:869 Recent Insider Trading, March 11th 2020

Playmates Toys is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Playmates Toys

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own HK$5.6m worth of Playmates Toys stock, about 1.5% of the company. I generally like to see higher levels of ownership.

So What Do The Playmates Toys Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Playmates Toys stock. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Playmates Toys has 3 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course Playmates Toys 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.