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 shareholders might well want to know whether insiders have been buying or selling shares in Hello Pal International Inc (CNSX:HP).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, including certain disclosures.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Hello Pal International
Over the last year, we can see that the biggest insider sale was by Director Sin Wong for CA$120k worth of shares, at about CA$0.24 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is CA$0.10. So it is hard to draw any strong conclusion from it.
Over the last year, we note insiders sold 850.00k shares worth CA$208k. Over the last year we saw more insider selling of Hello Pal International shares, than buying. The average sell price was around CA$0.24. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (CA$0.10), so it probably doesn’t tell us a lot about the value on offer today. You can see the insider transactions 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Hello Pal International
For a common shareholder, it is worth checking how many shares are held by company 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’s good to see that Hello Pal International insiders own 21% of the company, worth about CA$1.4m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Hello Pal International Tell Us?
The fact that there have been no Hello Pal International insider transactions recently certainly doesn’t bother us. We don’t take much encouragement from the transactions by Hello Pal International insiders. The modest level of insider ownership is, at least, some comfort. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Hello Pal International may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.