Have Insiders Been Buying Tianjin Tianbao Energy Co., Ltd. (HKG:1671) Shares?
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Tianjin Tianbao Energy Co., Ltd. (HKG:1671), you may well want to know whether insiders have been buying or selling.
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.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
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View our latest analysis for Tianjin Tianbao Energy
The Last 12 Months Of Insider Transactions At Tianjin Tianbao Energy
Yun Nan Yuan made the biggest insider purchase in the last 12 months. That single transaction was for HK$5.3m worth of shares at a price of HK$1.93 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$1.41). 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Yun Nan Yuan was the only individual insider to buy shares in the last twelve months.
Yun Nan Yuan purchased 3.3m shares over the year. The average price per share was HK$1.90. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Tianjin Tianbao Energy is not the only stock that insiders are buying. 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
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Tianjin Tianbao Energy insiders own 3.3% of the company, worth about HK$8.0m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.
So What Does This Data Suggest About Tianjin Tianbao Energy Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Tianjin Tianbao Energy stock. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
But note: Tianjin Tianbao Energy 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.
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.
