It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Yihai International Holding Ltd. (HKG:1579).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Yihai International Holding
The CFO & Executive Director, Shengfeng Sun, made the biggest insider sale in the last 12 months. That single transaction was for HK$16m worth of shares at a price of HK$125 each. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$55.25. So it is hard to draw any strong conclusion from it. Shengfeng Sun was the only individual insider to sell shares in the last twelve months.
Shengfeng Sun sold a total of 200.00k shares over the year at an average price of CN¥125. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Yihai International Holding
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It’s great to see that Yihai International Holding insiders own 38% of the company, worth about HK$21b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Yihai International Holding Insiders?
It doesn’t really mean much that no insider has traded Yihai International Holding shares in the last quarter. While we feel good about high insider ownership of Yihai International Holding, we can’t say the same about the selling of shares. 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. To assist with this, we’ve discovered 1 warning sign that you should run your eye over to get a better picture of Yihai International Holding.
Of course Yihai International Holding 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, but not derivative transactions.
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