Read This Before Selling Shangri-La Asia Limited (HKG:69) 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 we’ll take a look at whether insiders have been buying or selling shares in Shangri-La Asia Limited (HKG:69).
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, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
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The Last 12 Months Of Insider Transactions At Shangri-La Asia
Hui Kwong Kuok made the biggest insider purchase in the last 12 months. That single transaction was for HK$138m worth of shares at a price of HK$11.48 each. That means that even when the share price was higher, 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. We generally consider it a positive if insiders have been buying on market, even above the current price.
Happily, we note that in the last year insiders bought 17.53m shares for a total of HK$199m. Overall, Shangri-La Asia insiders were net buyers last year. They paid about HK$11.33 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is HK$10.12. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Shangri-La Asia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Shangri-La Asia Have Bought Stock Recently
It’s good to see that Shangri-La Asia insiders have made notable investments in the company’s shares. Specifically, Kim Swee Ho bought US$26m worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership of Shangri-La Asia
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Shangri-La Asia insiders own about HK$1.4b worth of shares (which is 3.4% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Shangri-La Asia Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Shangri-La Asia. Nice! Of course, the future is what matters most. So if you are interested in Shangri-La Asia, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
