Those following along with Tomson Group Limited (HKG:258) will no doubt be intrigued by the recent purchase of shares by Albert Tong, Executive Vice-Chairman of the company, who spent a stonking HK$23m on stock at an average price of HK$2.29. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 3.1%.

View our latest analysis for Tomson Group

Tomson Group Insider Transactions Over The Last Year

The MD & Chairman Feng Hsu made the biggest insider purchase in the last 12 months. That single transaction was for HK$73m worth of shares at a price of HK$1.52 each. We do like to see buying, but this purchase was made at well below the current price of HK$3.17. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Tomson Group insiders were buying shares, but not selling. They paid about HK$1.72 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Tomson Group

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Tomson Group insiders own 66% of the company, currently worth about HK$4.5b 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 Tomson Group Tell Us?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Tomson Group. One for the watchlist, at least! While it's good to be aware of 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. When we did our research, we found 2 warning signs for Tomson Group (1 shouldn't be ignored!) that we believe deserve your full attention.

Of course Tomson Group 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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