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 Chinese Strategic Holdings Limited (HKG:8089).
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, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. 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.
Chinese Strategic Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Kam-Ching Ng, for HK$776k worth of shares, at about HK$0.41 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.33. So it may not shed much light on insider confidence at current levels. Kam-Ching Ng was the only individual insider to sell over the last year.
Kam-Ching Ng ditched 11230200 shares over the year. The average price per share was HK$0.34. The chart below shows insider transactions (by individuals) over the last year. 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.
Chinese Strategic Holdings Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Chinese Strategic Holdings. Specifically, insider Kam-Ching Ng ditched HK$3.6m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. From our data, it seems that Chinese Strategic Holdings insiders own 6.9% of the company, worth about HK$6.4m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Chinese Strategic Holdings Insiders?
An insider sold Chinese Strategic Holdings shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we're not rushing to buy, to say the least. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
Of course Chinese Strategic 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, but not derivative transactions.
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 email@example.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.