We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 VCREDIT Holdings Limited (HKG:2003).
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, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. 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 VCREDIT Holdings
Over the last year, we can see that the biggest insider sale was by the insider, Yang Liu, for HK$190m worth of shares, at about HK$9.00 per share. That means that an insider was selling shares at around the current price of HK$8.83. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Yang Liu was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid HK$77m for 8.7m shares. But insiders sold 29.2m shares worth HK$262m. Yang Liu sold a total of 29.2m shares over the year at an average price of CN¥9.00. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
VCREDIT Holdings Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at VCREDIT Holdings. We can see that Independent Non-Executive Director Ngee Huat Seek paid CN¥1.9m for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of VCREDIT Holdings
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that VCREDIT Holdings insiders own 48% of the company, worth about HK$2.0b. 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 VCREDIT Holdings Tell Us?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider, suggests they are well aligned and optimistic. 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 VCREDIT Holdings 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.
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 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. Thank you for reading.