Those following along with SenseTime Group Inc. (HKG:20) will no doubt be intrigued by the recent purchase of shares by Li Xu, Co-Founder of the company, who spent a stonking HK$7.4m on stock at an average price of HK$1.49. While that only increased their holding size by 0.9%, it is still a big swing by our standards.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Over the last year, we can see that the biggest insider purchase was by Co-founder Bing Xu for HK$11m worth of shares, at about HK$1.10 per share. We do like to see buying, but this purchase was made at well below the current price of HK$1.50. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While SenseTime Group insiders bought shares during the last year, they didn't sell. The average buy price was around HK$1.23. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for SenseTime Group
SenseTime Group is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that SenseTime Group insiders own 23% of the company, worth about HK$13b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about SenseTime Group. That's what I like to see! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that SenseTime Group has 1 warning sign and it would be unwise to ignore it.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocks
Try a Demo Portfolio for FreeHave 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.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.