We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Hello Pal International Inc. (CNSX:HP), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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 Hello Pal International
In the last twelve months, the biggest single sale by an insider was when Director Sin Wong sold CA$120k worth of shares at a price of 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 may not shed much light on insider confidence at current levels.
We note that in the last year insiders divested 850.00k shares for a total of CA$208k. All up, insiders sold more shares in Hello Pal International than they bought, over the last year. They sold for an average price of about 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. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Hello Pal International
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. We usually like to see fairly high levels of insider ownership. It appears that Hello Pal International insiders own 21% of the company, worth about CA$1.6m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Hello Pal International Insiders?
It doesn’t really mean much that no insider has traded Hello Pal International shares in the last quarter. Our analysis of Hello Pal International insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Along with insider transactions, I recommend checking if Hello Pal International is growing revenue. This free chart of historic revenue and earnings should make that easy.
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.
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