Those following along with Elegance Optical International Holdings Limited (HKG:907) will no doubt be intrigued by the recent purchase of shares by insider Kitchell Bin, who spent a stonking HK$10m on stock at an average price of HK$0.14. That increased their holding by a full 101%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.
Elegance Optical International Holdings Insider Transactions Over The Last Year
Notably, that recent purchase by Kitchell Bin is the biggest insider purchase of Elegance Optical International Holdings shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of HK$0.15. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Elegance Optical International Holdings share holders is that an insider was buying at near the current price. Kitchell Bin was the only individual insider to buy shares in the last twelve months.
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!
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Insider Ownership of Elegance Optical International Holdings
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Elegance Optical International Holdings insiders own about HK$20m worth of shares. That equates to 22% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Elegance Optical International Holdings Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Elegance Optical International Holdings insiders are well aligned, and that they may think the share price is too low. Along with insider transactions, I recommend checking if Elegance Optical International Holdings is growing revenue. This free chart of historic revenue and earnings should make that easy.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
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