Yahoo Finance Possible Turnaround For BAIYU Holdings Insiders, Still Down US$5.7m
Some of the losses seen by insiders who purchased US$20.9m worth of BAIYU Holdings, Inc. (NASDAQ:BYU) shares over the past year were recovered after the stock increased by 17% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$5.7m 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.
Check out our latest analysis for BAIYU Holdings
The Last 12 Months Of Insider Transactions At BAIYU Holdings
The insider Katie Ou made the biggest insider purchase in the last 12 months. That single transaction was for US$7.3m worth of shares at a price of US$2.09 each. That means that an insider was happy to buy shares at above the current price of US$1.52. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While BAIYU Holdings insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
BAIYU Holdings Insiders Bought Stock Recently
Over the last quarter, BAIYU Holdings insiders have spent a meaningful amount on shares. In total, insiders bought US$21m 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
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that BAIYU Holdings insiders own 58% of the company, worth about US$17m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About BAIYU Holdings Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about BAIYU Holdings. That's what I like to see! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that BAIYU Holdings is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored...
Of course BAIYU Holdings 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.
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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.
