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 Dafeng Port Heshun Technology Company Limited (HKG:8310).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. 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.
Dafeng Port Heshun Technology Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Wen Jiang bought HK$1.5m worth of shares at a price of HK$0.10 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.37), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Wen Jiang bought 16.22m shares over the last 12 months at an average price of HK$0.11. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Dafeng Port Heshun Technology Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Dafeng Port Heshun Technology shares over the last three months. We note insider Wen Jiang cashed in HK$819k worth of shares. On the other hand we note insider Wen Jiang bought HK$209k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Does Dafeng Port Heshun Technology Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 6.0% of Dafeng Port Heshun Technology shares, worth about HK$28m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Dafeng Port Heshun Technology Insider Transactions Indicate?
The stark truth for Dafeng Port Heshun Technology is that there has been more insider selling than insider buying in the last three months. But we take heart from prior transactions. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. Along with insider transactions, I recommend checking if Dafeng Port Heshun Technology is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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