Need To Know: EVA Precision Industrial Holdings Limited (HKG:838) Insiders Have Been Buying Shares

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 EVA Precision Industrial Holdings Limited (HKG:838), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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. 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'.

View our latest analysis for EVA Precision Industrial Holdings

EVA Precision Industrial Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Co-Founder Yaohua Zhang bought HK$2.5m worth of shares at a price of HK$0.51 per share. That means that an insider was happy to buy shares at around the current price of HK$0.62. 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 do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the EVA Precision Industrial Holdings insiders decided to buy shares at close to current prices.

In the last twelve months EVA Precision Industrial Holdings insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

EVA Precision Industrial Holdings Insiders Bought Stock Recently

It's good to see that EVA Precision Industrial Holdings insiders have made notable investments in the company's shares. Overall, two insiders shelled out HK$8.3m for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that EVA Precision Industrial Holdings insiders own 43% of the company, worth about HK$465m. 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 EVA Precision Industrial Holdings Insider Transactions Indicate?

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 EVA Precision Industrial Holdings. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for EVA Precision Industrial Holdings (of which 2 can't be ignored!) you should know about.

But note: EVA Precision Industrial 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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