Insider Purchases Worth CN¥216.2m See Losses As CMGE Technology Group Market Value Drops To HK$2.3b

Simply Wall St · 10/18 02:34

The recent price decline of 12% in CMGE Technology Group Limited's (HKG:302) stock may have disappointed insiders who bought CN¥216.2m worth of shares at an average price of CN¥1.61 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CN¥107.3m, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for CMGE Technology Group

The Last 12 Months Of Insider Transactions At CMGE Technology Group

Over the last year, we can see that the biggest insider purchase was by insider Yat Hong Chu for HK$168m worth of shares, at about HK$1.68 per share. That means that an insider was happy to buy shares at above the current price of HK$0.80. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months CMGE Technology Group insiders were buying shares, but not selling. 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!

insider-trading-volume
SEHK:302 Insider Trading Volume October 18th 2024

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.

CMGE Technology Group Insiders Bought Stock Recently

It's good to see that CMGE Technology Group insiders have made notable investments in the company's shares. Specifically, insider Yat Hong Chu bought HK$168m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership Of CMGE Technology Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 17% of CMGE Technology Group shares, worth about HK$392m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At CMGE Technology Group Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest CMGE Technology Group insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for CMGE Technology Group that deserve your attention before buying any shares.

Of course CMGE Technology 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 of direct interests only, but not derivative transactions or indirect interests.