It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Media Chinese International Limited (HKG:685), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’

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Media Chinese International Insider Transactions Over The Last Year

Hiew Diong made the biggest insider sale in the last 12 months. That single transaction was for HK$9.6m worth of shares at a price of HK$2.67 each. That is hardly a positive sign, even though it took place above the latest price (HK$0.39). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Hiew Diong.

Over the last year, we can see that insiders have bought 5.51m shares worth HK$2.4m. On the other hand they divested 3.59m shares, for HK$9.6m. 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!

Media Chinese International is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Media Chinese International Have Bought Stock Recently

Over the last quarter, Media Chinese International insiders have spent a meaningful amount on shares. In total, insiders bought US$1.6m 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

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. Insiders own 6.9% of Media Chinese International shares, worth about HK$43m, according to our data. But they may have an indirect interest through a corporate structure that we haven’t picked up on. Whilst better than nothing, we’re not overly impressed by these holdings.

So What Do The Media Chinese International Insider Transactions Indicate?

It is good to see recent purchasing. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Media Chinese International, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. 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.

But note: Media Chinese International 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.

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.