We often see insiders buying up shares in companies that perform well over the long term. 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 i-CABLE Communications Limited (HKG:1097).
What Is Insider Selling?
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.
We don't think shareholders should simply follow insider transactions. 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.
The Last 12 Months Of Insider Transactions At i-CABLE Communications
In the last twelve months, the biggest single purchase by an insider was when insider Hung Sang Ng bought HK$5.0m worth of shares at a price of HK$0.10 per share. That means that an insider was happy to buy shares at above the current price of HK$0.078. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months i-CABLE Communications insiders were buying shares, but not selling. 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.
Does i-CABLE Communications 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests i-CABLE Communications insiders own 3.5% of the company, worth about HK$20m. We consider this fairly low insider ownership.
So What Does This Data Suggest About i-CABLE Communications Insiders?
It doesn't really mean much that no insider has traded i-CABLE Communications shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in i-CABLE Communications and we see no evidence to suggest they are worried about the future. Along with insider transactions, I recommend checking if i-CABLE Communications is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course i-CABLE Communications 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.