Have Insiders Been Buying Yuk Wing Group Holdings Limited (HKG:1536) Shares This Year?

We often see insiders buying up shares in companies that perform well over the long term. 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 Yuk Wing Group Holdings Limited (HKG:1536).

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 don't think shareholders should simply follow insider transactions. 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'.

View our latest analysis for Yuk Wing Group Holdings

The Last 12 Months Of Insider Transactions At Yuk Wing Group Holdings

In the last twelve months, the biggest single purchase by an insider was when Executive Director Shixin Huang bought HK$1.2m worth of shares at a price of HK$0.25 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.25). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Shixin Huang was the only individual insider to buy during the last year.

Shixin Huang bought 14.58m shares over the last 12 months at an average price of HK$0.25. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Yuk Wing Group Holdings insiders own 60% of the company, currently worth about HK$57m based on the recent share price. 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 Yuk Wing Group Holdings Insider Transactions Indicate?

The fact that there have been no Yuk Wing Group 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 Yuk Wing Group Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Yuk Wing Group Holdings has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: Yuk Wing Group 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.

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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