Should You Take Comfort From Insider Transactions At Kingbo Strike Limited (HKG:1421)?

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 we’ll take a look at whether insiders have been buying or selling shares in Kingbo Strike Limited (HKG:1421).

What Is Insider Buying?

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, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company‚Äôs stock when the firm is about to reveal new agreements with customers and suppliers’.

Check out our latest analysis for Kingbo Strike

Kingbo Strike Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Director Runxiong Yao bought HK$620k worth of shares at a price of HK$0.16 per share. So it’s clear an insider wanted to buy, at around the current price, which is HK$0.17. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we’re pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Runxiong Yao.

Runxiong Yao bought a total of 8070000 shares over the year at an average price of HK$0.17. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Kingbo Strike is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

SEHK:1421 Recent Insider Trading, December 8th 2019
SEHK:1421 Recent Insider Trading, December 8th 2019

Insider Ownership of Kingbo Strike

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. From our data, it seems that Kingbo Strike insiders own 5.8% of the company, worth about HK$14m. Whilst better than nothing, we’re not overly impressed by these holdings.

What Might The Insider Transactions At Kingbo Strike Tell Us?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Kingbo Strike insiders are doubting the company, and they do own shares. 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 Kingbo Strike 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.