Should You Take Comfort From Insider Transactions At Yanlord Land Group Limited (SGX:Z25)?
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Yanlord Land Group Limited (SGX:Z25).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. 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.'
Check out our latest analysis for Yanlord Land Group
The Last 12 Months Of Insider Transactions At Yanlord Land Group
In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Sheng Jian Zhong bought S$16m worth of shares at a price of S$1.75 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$1.43). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders paid S$44m for 26.0m shares purchased. While Yanlord Land Group insiders bought shares last year, they didn't sell. 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!
Yanlord Land Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Yanlord Land Group Insiders Bought Stock Recently
It's good to see that Yanlord Land Group insiders have made notable investments in the company's shares. Specifically, Independent Director Pian Tee Hong bought CN¥137k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Yanlord Land Group Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Yanlord Land Group insiders own 70% of the company, worth about S$1.9b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Yanlord Land Group Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Yanlord Land Group insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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.
Of course Yanlord Land Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
