We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in China SCE Group Holdings Limited (HKG:1966).

What Is Insider Selling?

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, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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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The Last 12 Months Of Insider Transactions At China SCE Group Holdings

In the last twelve months, the biggest single purchase by an insider was when Chairman Chiu Wong bought HK$14m worth of shares at a price of HK$2.82 per share. So it’s clear an insider wanted to buy, at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price.

In the last twelve months insiders paid HK$123m for 43.00m shares purchased. In total, China SCE Group Holdings insiders bought more than they sold over the last year. Their average price was about HK$2.87. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of HK$3.18. You can see the insider transactions (by 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!

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at China SCE Group Holdings Have Bought Stock Recently

It’s good to see that China SCE Group Holdings insiders have made notable investments in the company’s shares. Overall, 3 insiders shelled out CN¥113m for shares in the company — and none sold. This is a positive in our book as it implies some confidence.

Does China SCE Group Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. China SCE Group Holdings insiders own about HK$6.8b worth of shares (which is 59% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At China SCE Group Holdings Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about China SCE Group Holdings. That’s what I like to see! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for China SCE Group Holdings.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.