Those following along with Matrix Holdings Limited (HKG:1005) will no doubt be intrigued by the recent purchase of shares by King Cheung Cheng, Executive Director of the company, who spent a stonking HK$7.6m on stock at an average price of HK$0.76. That purchase boosted their holding by 83%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

Matrix Holdings Insider Transactions Over The Last Year

In fact, the recent purchase by King Cheung Cheng was the biggest purchase of Matrix Holdings shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of HK$0.55. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Matrix Holdings insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Matrix Holdings insiders own 74% of the company, worth about HK$309m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Matrix Holdings Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Matrix Holdings. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Matrix Holdings. For example, Matrix Holdings has 4 warning signs (and 2 which are potentially serious) we think you should know about.

Of course Matrix 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com