It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we’ll take a look at whether insiders have been buying or selling shares in Wynn Macau, Limited (HKG:1128).
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, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Wynn Macau
In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, Kin-Fung Lam, sold HK$3.2m worth of shares at a price of HK$21.28 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. It’s of some comfort that this sale was conducted at a price well above the current share price, which is HK$15.66. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Kin-Fung Lam.
Kin-Fung Lam divested 346k shares over the last 12 months at an average price of US$21.28. 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!
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Wynn Macau insiders own 0.4% of the company, worth about HK$369m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Wynn Macau Insider Transactions Indicate?
The fact that there have been no Wynn Macau insider transactions recently certainly doesn’t bother us. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of Wynn Macau insider transactions don’t fill us with confidence. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Wynn Macau.
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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.