Have Insiders Been Buying China Resources Beer (Holdings) Company Limited (HKG:291) Shares?

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 we'll take a look at whether insiders have been buying or selling shares in China Resources Beer (Holdings) Company Limited (HKG:291).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 China Resources Beer (Holdings)

The Last 12 Months Of Insider Transactions At China Resources Beer (Holdings)

In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Xiaohai Hou bought HK$3.9m worth of shares at a price of HK$39.49 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$56.50. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Xiaohai Hou bought 150.00k shares over the last 12 months at an average price of HK$39.44. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of China Resources Beer (Holdings)

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.05% of China Resources Beer (Holdings) shares, worth about HK$86m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The China Resources Beer (Holdings) Insider Transactions Indicate?

The fact that there have been no China Resources Beer (Holdings) insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in China Resources Beer (Holdings) and we see no evidence to suggest they are worried about 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. In terms of investment risks, we've identified 2 warning signs with China Resources Beer (Holdings) and understanding these should be part of your investment process.

But note: China Resources Beer (Holdings) 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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