Consumer Durables News

Having purchased HK$40m worth of Raymond Industrial Limited (HKG:229) stock, the recent 14% pullback is not what insiders may have expected


Insiders who bought HK$40m worth of Raymond Industrial Limited’s (HKG:229) stock at an average buy price of HK$1.00 over the last year may be disappointed by the recent 14% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth HK$30m, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

However if you’d rather see where the opportunities and risks are within 229’s industry, you can check out our analysis on the HK Consumer Durables industry.

Raymond Industrial Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Vice Chairman & GM Ying Man Wong bought HK$40m worth of shares at a price of HK$1.00 per share. That means that an insider was happy to buy shares at above the current price of HK$0.75. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Ying Man Wong was the only individual insider to buy during the last year.

Ying Man Wong bought a total of 40.21m shares over the year at an average price of HK$1.00. 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!

SEHK:229 Insider Trading Volume October 2nd 2022

Raymond Industrial 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.

Does Raymond Industrial Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Raymond Industrial insiders own 44% of the company, currently worth about HK$166m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Raymond Industrial Tell Us?

The fact that there have been no Raymond Industrial insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Raymond Industrial insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. 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. At Simply Wall St, we found 1 warning sign for Raymond Industrial that deserve your attention before buying any shares.

Of course Raymond Industrial 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, but not derivative transactions.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Raymond Industrial is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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