We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in Poly Culture Group Corporation Limited (HKG:3636).
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, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.
The Last 12 Months Of Insider Transactions At Poly Culture Group
Notably, that recent purchase by Shuming Li is the biggest insider purchase of Poly Culture Group shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of HK$5.50. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Poly Culture Group insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Shuming Li.
Shuming Li purchased 194.80k shares over the year. The average price per share was HK$5.48. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. Based on our data, Poly Culture Group insiders have about 1.8% of the stock, worth approximately HK$25m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.
So What Does This Data Suggest About Poly Culture Group Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Poly Culture Group shares, given these transactions (along with notable insider ownership of the company). I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Poly Culture Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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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