Have Insiders Been Selling BabyTree Group (HKG:1761) Shares This Year?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in BabyTree Group (HKG:1761).

Do Insider Transactions Matter?

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.

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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for BabyTree Group

The Last 12 Months Of Insider Transactions At BabyTree Group

Over the last year, we can see that the biggest insider sale was by the CFO & Executive Director, Chong Xu, for HK$1.4m worth of shares, at about HK$1.42 per share. So we know that an insider sold shares at around the present share price of HK$1.29. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Chong Xu was the only individual insider to sell shares in the last twelve months. Notably Chong Xu was also the biggest buyer, having purchased HK$1.6m worth of shares.

Chong Xu ditched 2.12m shares over the year. The average price per share was CN¥1.41. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our information indicates that BabyTree Group insiders own about HK$711k worth of shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. This level of insider ownership is notably low, and not very encouraging.

So What Do The BabyTree Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded BabyTree Group shares in the last quarter. The insider transactions at BabyTree Group are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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