Insider Stock Buying Reaches US$4.22m On HSBC Holdings

Quite a few insiders have dramatically grown their holdings in HSBC Holdings plc (LON:HSBA) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for HSBC Holdings

The Last 12 Months Of Insider Transactions At HSBC Holdings

In the last twelve months, the biggest single purchase by an insider was when Group CFO Georges Bahjat Elhedery bought UK£4.0m worth of shares at a price of UK£5.97 per share. Even though the purchase was made at a significantly lower price than the recent price (UK£6.95), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 707.13k shares for UK£4.2m. But they sold 311.43k shares for UK£1.8m. In total, HSBC Holdings insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At HSBC Holdings Have Sold Stock Recently

The last three months saw significant insider selling at HSBC Holdings. Specifically, insiders ditched UK£1.1m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of HSBC Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.05% of HSBC Holdings shares, worth about UK£60m. 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 Does This Data Suggest About HSBC Holdings Insiders?

Insiders sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So we're not overly bothered by recent selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, HSBC Holdings has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.