Have Insiders Been Buying Xingda International Holdings Limited (HKG:1899) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Xingda International Holdings Limited (HKG:1899).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Xingda International Holdings

The Last 12 Months Of Insider Transactions At Xingda International Holdings

The Executive Chairman Jinlan Liu made the biggest insider purchase in the last 12 months. That single transaction was for HK$6.4m worth of shares at a price of HK$2.13 each. So it's clear an insider wanted to buy, at around the current price, which is HK$2.16. Of course they may have changed their mind. But this suggests they are optimistic. 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. Happily, the Xingda International Holdings insiders decided to buy shares at close to current prices.

Xingda International Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) 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!

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

Insiders at Xingda International Holdings Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Xingda International Holdings. Executive Chairman Jinlan Liu spent HK$5.5m on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership of Xingda International 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Xingda International Holdings insiders own about HK$1.5b worth of shares (which is 44% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Xingda International Holdings Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Xingda International Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Xingda International Holdings. You'd be interested to know, that we found 2 warning signs for Xingda International Holdings and we suggest you have a look.

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, but not derivative transactions.

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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. 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.
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