Insiders who purchased US$1.94m worth of CIMG Inc. (NASDAQ:IMG) shares over the past year recouped some of their losses after price gained 13% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$1.0m since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At CIMG

In the last twelve months, the biggest single purchase by an insider was when insider Yumei Liu bought US$798k worth of shares at a price of US$1.47 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.53). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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.

In the last twelve months insiders purchased 1.75m shares for US$1.9m. But they sold 222.97k shares for US$343k. In the last twelve months there was more buying than selling by CIMG insiders. The average buy price was around US$1.11. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for CIMG

CIMG is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does CIMG Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. CIMG insiders own about US$3.4m worth of shares (which is 65% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About CIMG Insiders?

It doesn't really mean much that no insider has traded CIMG shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like CIMG 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. For instance, we've identified 6 warning signs for CIMG (3 are a bit unpleasant) you should be aware of.

But note: CIMG may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.