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 before you buy or sell Sitoy Group Holdings Limited (HKG:1023), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Sitoy Group Holdings Insider Transactions Over The Last Year
Chairman Wah Yeung made the biggest insider purchase in the last 12 months. That single transaction was for HK$4.0m worth of shares at a price of HK$2.00 each. That means that even when the share price was higher than HK$1.67 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders bought 5.0m shares for a total of HK$9.1m. While Sitoy Group Holdings insiders bought shares last year, they didn’t sell. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Sitoy Group Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Sitoy Group 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. Sitoy Group Holdings insiders own 72% of the company, currently worth about HK$1.2b 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 Does This Data Suggest About Sitoy Group Holdings Insiders?
The fact that there have been no Sitoy Group Holdings insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Sitoy Group Holdings insiders think the business has merit. Along with insider transactions, I recommend checking if Sitoy Group Holdings is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.