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 Beijing Sports and Entertainment Industry Group Limited (HKG:1803), 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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
Beijing Sports and Entertainment Industry Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Director Ngai Tsui for HK$16m worth of shares, at about HK$2.37 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.34). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Ngai Tsui was also the biggest seller.
In the last twelve months insiders purchased 10.0m shares for HK$19m. But insiders sold 8.4m shares worth HK$2.6m. In the last twelve months there was more buying than selling by Beijing Sports and Entertainment Industry Group insiders. The average buy price was around HK$1.90. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Beijing Sports and Entertainment Industry Group Insiders Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Beijing Sports and Entertainment Industry Group. In total, two insiders bought HK$3.1m worth of shares in that time. On the other hand, insiders netted HK$2.6m by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does Beijing Sports and Entertainment Industry Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From what we can see in our data, insiders own only about HK$950k worth of Beijing Sports and Entertainment Industry Group shares. We might be missing something but that seems like very low insider ownership.
So What Does This Data Suggest About Beijing Sports and Entertainment Industry Group Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Beijing Sports and Entertainment Industry Group stock. 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 .
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.