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 before you buy or sell CITIC Telecom International Holdings Limited (HKG:1883), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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 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.
CITIC Telecom International Holdings Insider Transactions Over The Last Year
The insider, Tin Chan, made the biggest insider sale in the last 12 months. That single transaction was for HK$3.7m worth of shares at a price of HK$3.31 each. That means that an insider was selling shares at around the current price of HK$2.98. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). The only individual insider seller over the last year was Tin Chan.
Tin Chan sold a total of 2072000 shares over the year at an average price of HK$3.28. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership of CITIC Telecom International Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests CITIC Telecom International Holdings insiders own 0.1% of the company, worth about HK$13m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.
So What Do The CITIC Telecom International Holdings Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of CITIC Telecom International Holdings insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in CITIC Telecom International Holdings, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.