We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Tingyi (Cayman Islands) Holding Corp. (HKG:322).
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At Tingyi (Cayman Islands) Holding
Chairman of the Board Hong-Ming Wei made the biggest insider purchase in the last 12 months. That single transaction was for HK$50m worth of shares at a price of HK$9.91 each. That implies that an insider found the current price of HK$11.96 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.
Over the last year, we can see that insiders have bought 5.1m shares worth HK$51m. In the last twelve months Tingyi (Cayman Islands) Holding insiders were buying shares, but not selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Tingyi (Cayman Islands) Holding is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Tingyi (Cayman Islands) Holding
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. It appears that Tingyi (Cayman Islands) Holding insiders own 0.4% of the company, worth about HK$277m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Tingyi (Cayman Islands) Holding Insiders?
The fact that there have been no Tingyi (Cayman Islands) Holding insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Tingyi (Cayman Islands) Holding insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Tingyi (Cayman Islands) Holding.
But note: Tingyi (Cayman Islands) Holding 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.
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.
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