Whilst it may not be a huge deal, we thought it was good to see that the Kato (Hong Kong) Holdings Limited (HKG:2189) CEO & Executive Chairman of the Board, Shi Shing Ngai, recently bought HK$559k worth of stock, for HK$0.51 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.
View our latest analysis for Kato (Hong Kong) Holdings
The Last 12 Months Of Insider Transactions At Kato (Hong Kong) Holdings
In fact, the recent purchase by CEO & Executive Chairman of the Board Shi Shing Ngai was not their only acquisition of Kato (Hong Kong) Holdings shares this year. Earlier in the year, they paid HK$0.57 per share in a HK$618k purchase. That means that even when the share price was higher than HK$0.49 (the recent price), an insider wanted to purchase shares. 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. The only individual insider to buy over the last year was Shi Shing Ngai.
Shi Shing Ngai bought 7.25m shares over the last 12 months at an average price of HK$0.54. You can see a visual depiction of insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does Kato (Hong Kong) Holdings Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Kato (Hong Kong) Holdings insiders own 70% of the company, worth about HK$341m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Kato (Hong Kong) 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Kato (Hong Kong) Holdings. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Kato (Hong Kong) Holdings you should know about.
But note: Kato (Hong Kong) Holdings 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 of direct interests only, but not derivative transactions or indirect interests.
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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.