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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 Jiyi Household International Holdings Limited (HKG:1495), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 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.’
Jiyi Household International Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Lin Hsiang Liaw for HK$48m worth of shares, at about HK$0.70 per share. Although we like to see insider buying, we note that this large purchase was at significantly lower prices. It may not shed much light on insider confidence at the current share price.
Happily, we note that in the last year insiders bought 98.60m shares for a total of HK$67m. In total, Jiyi Household International Holdings insiders bought more than they sold over the last year. The average buy price was around HK$0.68. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today’s share price. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Jiyi Household International Holdings Have Bought Stock Recently
It’s good to see that Jiyi Household International Holdings insiders have made notable investments in the company’s shares. In total, insiders bought CN¥53m worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does Jiyi Household International 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Jiyi Household International Holdings insiders own about HK$567m worth of shares (which is 77% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Jiyi Household International Holdings Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Jiyi Household International Holdings. Looks promising! I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
Of course Jiyi Household International Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.