Insiders who bought CN¥3.4m worth of Zylox-Tonbridge Medical Technology Co., Ltd. (HKG:2190) stock in the last year recovered part of their losses as the stock rose by 16% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CN¥2.1m since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Zylox-Tonbridge Medical Technology
The Last 12 Months Of Insider Transactions At Zylox-Tonbridge Medical Technology
Over the last year, we can see that the biggest insider purchase was by Founder Zhong Zhao for HK$1.8m worth of shares, at about HK$26.26 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$9.88). 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. Zhong Zhao was the only individual insider to buy during the last year.
Zhong Zhao bought 129.00k shares over the last 12 months at an average price of HK$26.19. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!SEHK:2190 Insider Trading Volume September 30th 2022
Zylox-Tonbridge Medical Technology 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 Zylox-Tonbridge Medical Technology
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Zylox-Tonbridge Medical Technology insiders own 24% of the company, currently worth about HK$792m 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.
What Might The Insider Transactions At Zylox-Tonbridge Medical Technology Tell Us?
It doesn't really mean much that no insider has traded Zylox-Tonbridge Medical Technology shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Zylox-Tonbridge Medical Technology insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. Case in point: We've spotted 1 warning sign for Zylox-Tonbridge Medical Technology you should be aware of.
But note: Zylox-Tonbridge Medical Technology 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.
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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.