Even if it's not a huge purchase, we think it was good to see that Yan Zhang, the Vice Chairlady & Co-CEO of Lerthai Group Limited (HKG:112) recently shelled out HK$346k to buy stock, at HK$3.27 per share. That might not be a big purchase but it only increased their holding by 6.2%, and could be interpreted as a good sign.
Lerthai Group Insider Transactions Over The Last Year
In fact, the recent purchase by Vice Chairlady & Co-CEO Yan Zhang was not their only acquisition of Lerthai Group shares this year. They previously made an even bigger purchase of HK$5.0m worth of shares at a price of HK$7.08 per share. That means that even when the share price was higher than HK$3.29 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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. Yan Zhang was the only individual insider to buy over the year.
Yan Zhang bought 1896000 shares over the last 12 months at an average price of HK$6.51. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Lerthai Group 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.
Does Lerthai Group Boast High Insider Ownership?
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. We usually like to see fairly high levels of insider ownership. Lerthai Group insiders own 60% of the company, currently worth about HK$1.5b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Lerthai Group Insiders?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Lerthai Group. That's what I like to see! I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.
But note: Lerthai Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.