Trade Alert: The Chairman & Co-CEO Of EC Healthcare (HKG:2138), Chi Fai Tang, Has Just Spent HK$7.2m Buying A Few More Shares

By
Simply Wall St
Published
March 15, 2022
SEHK:2138
Source: Shutterstock

Those following along with EC Healthcare (HKG:2138) will no doubt be intrigued by the recent purchase of shares by Chi Fai Tang, Chairman & Co-CEO of the company, who spent a stonking HK$7.2m on stock at an average price of HK$7.25. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.1%.

See our latest analysis for EC Healthcare

EC Healthcare Insider Transactions Over The Last Year

Notably, that recent purchase by Chairman & Co-CEO Chi Fai Tang was not the only time they traded EC Healthcare shares this year. They previously made a sale of -HK$406m worth of shares at a price of HK$14.50 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$5.92. So it may not tell us anything about how insiders feel about the current share price.

In the last twelve months insiders purchased 19.40m shares for HK$267m. But they sold 29.14m shares for HK$423m. Over the last year we saw more insider selling of EC Healthcare shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SEHK:2138 Insider Trading Volume March 15th 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does EC Healthcare Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. EC Healthcare insiders own 62% of the company, currently worth about HK$4.3b 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.

So What Does This Data Suggest About EC Healthcare Insiders?

It's certainly positive to see the recent insider purchases. But we can't say the same for the transactions over the last 12 months. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, EC Healthcare insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing EC Healthcare. While conducting our analysis, we found that EC Healthcare has 4 warning signs and it would be unwise to ignore these.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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