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As Vobile Group Limited's market cap (HKG:3738) drops to HK$8.2b, insiders might be questioning their decision to buy earlier this year

Simply Wall St ·  {{timeTz}}

The recent 4.8% drop in Vobile Group Limited's (HKG:3738) stock could come as a blow to insiders who purchased HK$12m worth of stock at an average buy price of HK$4.46 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only HK$11m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Vobile Group

Vobile Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Jian Lu, for HK$12m worth of shares, at about HK$6.63 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$3.94). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Jian Lu.

In the last twelve months insiders purchased 2.80m shares for HK$12m. But they sold 1.75m shares for HK$12m. In total, Vobile Group insiders bought more than they sold over the last year. Their average price was about HK$4.46. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volumeSEHK:3738 Insider Trading Volume August 1st 2022

Vobile 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 Vobile Group Boast High Insider Ownership?

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. It's great to see that Vobile Group insiders own 24% of the company, worth about HK$1.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Vobile Group Tell Us?

It doesn't really mean much that no insider has traded Vobile Group shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Vobile Group insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Vobile Group and we suggest you have a look.

Of course Vobile Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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