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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in CK Hutchison Holdings Limited (HKG:1).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'

View our latest analysis for CK Hutchison Holdings

CK Hutchison Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Group Co-MD & Executive Director Kin Ning Fok for HK$141m worth of shares, at about HK$405 per share. That means that even when the share price was higher than HK$75.10 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders paid HK$199m for 1.1m shares purchased. CK Hutchison Holdings may have bought shares in the last year, but they didn't sell any. The average buy price was around HK$176. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

CK Hutchison Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at CK Hutchison Holdings Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at CK Hutchison Holdings. Overall, three insiders shelled out HK$199m for shares in the company -- and none sold. This makes one think the business has some good points.

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. CK Hutchison Holdings insiders own about HK$84b worth of shares (which is 29% 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 CK Hutchison Holdings Insiders?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest CK Hutchison Holdings insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.