Have Insiders Been Buying Huajun International Group Limited (HKG:377) Shares?
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Huajun International Group Limited (HKG:377), you may well want to know whether insiders have been buying or selling.
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 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.’
Check out our latest analysis for Huajun International Group
The Last 12 Months Of Insider Transactions At Huajun International Group
Executive Chairman Guang Meng made the biggest insider purchase in the last 12 months. That single transaction was for HK$8.2m worth of shares at a price of HK$24.05 each. So it’s clear an insider wanted to buy, even at a higher price. 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 paid HK$19m for 794.32k shares. On the other hand they divested 4.64k shares, for HK$202k. Overall, Huajun International Group insiders were net buyers last year. They paid about HK$23.44 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is HK$11.16. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 Huajun International Group Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Huajun International Group. We can see that Guang Meng paid CN¥12m for shares in the company. No-one sold. That shows some optimism about the company’s future.
Does Huajun International 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Huajun International Group insiders own 74% of the company, currently worth about HK$501m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Huajun International Group Tell Us?
It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Huajun International Group. That’s what I like to see! To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course Huajun International Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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