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 before you buy or sell Kandi Technologies Group, Inc. (NASDAQ:KNDI), you may well want to know whether insiders have been buying or selling.
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 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.
The Last 12 Months Of Insider Transactions At Kandi Technologies Group
In the last twelve months, the biggest single purchase by an insider was when Chairman Xiaoming Hu bought US$756k worth of shares at a price of US$5.52 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$4.73). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Xiaoming Hu was the only individual insider to buy over the year.
Xiaoming Hu bought a total of 269.03k shares over the year at an average price of US$5.15. 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!
Kandi Technologies Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Kandi Technologies Group Have Sold Stock Recently
We have seen a bit of insider selling at Kandi Technologies Group, over the last three months. Independent Director Henry Yu divested only US$24k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
Does Kandi Technologies Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 29% of Kandi Technologies Group shares, worth about US$71m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Kandi Technologies Group Insiders?
Our data shows a little more insider selling, but no insider buying, in the last three months. But the sales were small, so we’re not concerned. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Kandi Technologies Group and their transactions don’t cause us concern. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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.
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