Quali-Smart Holdings loses HK$16 million in market value, but insiders expect an unexpected gain of HK$2.6 million

Insiders who bought Quali-Smart Holdings Limited (HKG:1348) over the past 12 months, you are likely to ignore the recent 13% drop in share price. Even after factoring in the recent loss, the HK$2.27 million worth of shares you bought are now worth HK$4.89 million, or in other words, your investment continues to yield good returns.

While we would never recommend that investors base their decisions solely on the behavior of company leaders, logic dictates that you should also pay attention to whether insiders are buying or selling shares.

Check out our latest analysis for Quali-Smart Holdings

Insider transactions of Quali-Smart Holdings in the last year

Over the last year, we saw that the largest insider purchase was by insider Sheng Chu, who bought HK$2.3 million worth of shares at a price of around HK$0.033 per share. While we like to see buys, this purchase was made well below the current price of HK$0.071. While this suggests that insiders believe the stock is undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.

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, just click on the chart below!

Quali-Smart Holdings is not the only stock that insiders are buying, so take a look at these free List of companies with insider purchases that remain under the radar.

Does Quali-Smart Holdings have a high level of insider ownership?

I like to look at how many shares insiders own in a company to get an idea of ​​how well they work with insiders. I think it’s a good sign when insiders own a significant number of shares in the company. Our data shows that insiders of Quali-Smart Holdings own about HK$12m worth of shares (that’s 11% of the company). But they might have an indirect interest through a corporate structure that we haven’t detected. We generally prefer to see higher insider ownership.

What could the insider transactions at Quali-Smart Holdings tell us?

There have been no insider transactions in the last three months – that doesn’t mean much. But insiders have shown more interest in the stock over the last year. Insiders own shares in Quali-Smart Holdings and their transactions don’t worry us. So these insider transactions can help us build a thesis about the stock, but it’s also worth knowing the risks this company faces. To help with that, we’ve found out 3 warning signs (1 should not be ignored!) that you should know before buying Quali-Smart Holdings shares.

If you would rather try another company – one with potentially better financials – then don’t miss this free List of interesting companies with HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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This Simply Wall St article is of a general nature. We comment solely on historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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