Trade Alert: The Chairman of the Board Of Deswell Industries, Inc. (NASDAQ:DSWL), Hon Pui, Has Just Spent US$622k Buying 2.1% More Shares

Those following along with Deswell Industries, Inc. (NASDAQ:DSWL) will no doubt be intrigued by the recent purchase of shares by Hon Pui, Chairman of the Board of the company, who spent a stonking US$622k on stock at an average price of US$3.20. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 2.1%.

See our latest analysis for Deswell Industries

The Last 12 Months Of Insider Transactions At Deswell Industries

In fact, the recent purchase by Hon Pui was the biggest purchase of Deswell Industries shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of US$3.11. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Hon Pui.

Hon Pui bought 287.79k shares over the last 12 months at an average price of US$3.31. 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!

insider-trading-volume

Deswell Industries is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Deswell Industries Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Deswell Industries insiders own 69% of the company, currently worth about US$34m 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 Do The Deswell Industries Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Deswell Industries. That's what I like to see! 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. To help with this, we've discovered 3 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Deswell Industries.

Of course Deswell Industries 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.

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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.

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