Should You Take Comfort From Insider Transactions At Regina Miracle International (Holdings) Limited (HKG:2199)?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Regina Miracle International (Holdings) Limited (HKG:2199), 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, most countries require that the company discloses such transactions to the market.

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 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 Regina Miracle International (Holdings)

Regina Miracle International (Holdings) Insider Transactions Over The Last Year

The Chairman & CEO Yau Lit Hung made the biggest insider purchase in the last 12 months. That single transaction was for HK$4.5m worth of shares at a price of HK$2.25 each. So it's clear an insider wanted to buy, at around the current price, which is HK$2.31. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Regina Miracle International (Holdings) share holders is that insiders were buying at near the current price.

Regina Miracle International (Holdings) insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Regina Miracle International (Holdings) is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Regina Miracle International (Holdings) Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Regina Miracle International (Holdings) insiders own about HK$2.3b worth of shares (which is 81% of the company). 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 Regina Miracle International (Holdings) Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Regina Miracle International (Holdings) shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Regina Miracle International (Holdings) insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. For instance, we've identified 4 warning signs for Regina Miracle International (Holdings) (1 doesn't sit too well with us) you should be aware of.

Of course Regina Miracle International (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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