Should You Review Recent Insider Transactions At World Super Holdings Limited (HKG:8612)?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 World Super Holdings Limited (HKG:8612), 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for World Super Holdings

The Last 12 Months Of Insider Transactions At World Super Holdings

The Executive Director, Hei Yuen Fok, made the biggest insider sale in the last 12 months. That single transaction was for HK$38m worth of shares at a price of HK$1.17 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$0.069). So it may not tell us anything about how insiders feel about the current share price. Hei Yuen Fok was the only individual insider to sell shares in the last twelve months.

Hei Yuen Fok divested 75.00m shares over the last 12 months at an average price of HK$0.57. 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!

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Insider Ownership of World Super Holdings

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. World Super Holdings insiders own 44% of the company, currently worth about HK$21m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At World Super Holdings Tell Us?

It doesn't really mean much that no insider has traded World Super Holdings shares in the last quarter. While we feel good about high insider ownership of World Super Holdings, we can't say the same about the selling of shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 2 warning signs we've spotted with World Super Holdings (including 1 which can't be ignored).

Of course World Super Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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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