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 before you buy or sell Xinyi Glass Holdings Limited (HKG:868), 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, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Xinyi Glass Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Ching Sai Tung bought HK$577m worth of shares at a price of HK$9.45 per share. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term. Notably Ching Sai Tung was also the biggest seller, having sold HK$741m worth of shares.
Over the last year, we can see that insiders have bought 124.31m shares worth HK$1.2b. But insiders sold 78.47m shares worth HK$741m. In the last twelve months there was more buying than selling by Xinyi Glass Holdings insiders. The average buy price was around HK$9.55. This is nice to see since it implies that insiders might see value around current prices (around HK$8.23). You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Does Xinyi Glass Holdings Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Xinyi Glass Holdings insiders own 58% of the company, worth about HK$19b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Xinyi Glass Holdings Insider Transactions Indicate?
The fact that there have been no Xinyi Glass Holdings insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Xinyi Glass Holdings insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. Of course, the future is what matters most. So if you are interested in Xinyi Glass Holdings, you should check out this free report on analyst forecasts for the company.
But note: Xinyi Glass Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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 email@example.com.