How Many Loco Hong Kong Holdings Limited (HKG:8162) Shares Did Insiders Buy, In The Last Year?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Loco Hong Kong Holdings Limited (HKG:8162).

What Is Insider Selling?

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'.

Check out our latest analysis for Loco Hong Kong Holdings

Loco Hong Kong Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Kwan Ho Poon bought HK$15m worth of shares at a price of HK$0.32 per share. So it's clear an insider wanted to buy, at around the current price, which is HK$0.36. 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. 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. The good news for Loco Hong Kong Holdings share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid HK$45m for 201.01m shares. But they sold 91.00m shares for HK$29m. In total, Loco Hong Kong Holdings insiders bought more than they sold over the last year. Their average price was about HK$0.22. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

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.

Insiders at Loco Hong Kong Holdings Have Bought Stock Recently

At Loco Hong Kong Holdings,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, four insiders bought HK$31m worth of shares in that time. But we did see insider Fong Chu sell shares worth HK$15m. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

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. We usually like to see fairly high levels of insider ownership. It's great to see that Loco Hong Kong Holdings insiders own 44% of the company, worth about HK$123m. 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 Loco Hong Kong Holdings Tell Us?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Loco Hong Kong Holdings. That's what I like to see! 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. Be aware that Loco Hong Kong Holdings is showing 5 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

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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