Should You Take Comfort From Insider Transactions At Qinqin Foodstuffs Group (Cayman) Company Limited (HKG:1583)?

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 Qinqin Foodstuffs Group (Cayman) Company Limited (HKG:1583), 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 don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Qinqin Foodstuffs Group (Cayman)

The Last 12 Months Of Insider Transactions At Qinqin Foodstuffs Group (Cayman)

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board Ching Lau Hui bought HK$17m worth of shares at a price of HK$2.38 per share. That means that an insider was happy to buy shares at above the current price of HK$2.26. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Ching Lau Hui was the only individual insider to buy shares in the last twelve months.

Ching Lau Hui purchased 9.67m shares over the year. The average price per share was HK$2.36. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Qinqin Foodstuffs Group (Cayman) 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. We usually like to see fairly high levels of insider ownership. Qinqin Foodstuffs Group (Cayman) insiders own about HK$712m worth of shares (which is 47% 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.

What Might The Insider Transactions At Qinqin Foodstuffs Group (Cayman) Tell Us?

It doesn't really mean much that no insider has traded Qinqin Foodstuffs Group (Cayman) shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Qinqin Foodstuffs Group (Cayman) insiders think the business has merit. 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. While conducting our analysis, we found that Qinqin Foodstuffs Group (Cayman) has 1 warning sign and it would be unwise to ignore it.

But note: Qinqin Foodstuffs Group (Cayman) 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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