Insiders who bought CN¥1.4m worth of Sapphire Corporation Limited (SGX:BRD) stock in the last year have seen some of their losses recouped as the stock gained 31% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CN¥509k since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Sapphire
The Last 12 Months Of Insider Transactions At Sapphire
Over the last year, we can see that the biggest insider purchase was by insider Xiaobo Li for S$1.4m worth of shares, at about S$0.10 per share. That means that even when the share price was higher than S$0.063 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Xiaobo Li.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Sapphire is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership Of Sapphire
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. Insiders own 23% of Sapphire shares, worth about S$5.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Sapphire Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Sapphire shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Sapphire and we see no evidence to suggest they are worried about the future. 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've found that Sapphire has 3 warning signs (2 can't be ignored!) that deserve your attention before going any further with your analysis.