We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Beijing Tong Ren Tang Chinese Medicine Company Limited (HKG:3613), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 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’.
The Last 12 Months Of Insider Transactions At Beijing Tong Ren Tang Chinese Medicine
Chairman of the Board Yong Ding made the biggest insider purchase in the last 12 months. That single transaction was for HK$649k worth of shares at a price of HK$12.98 each. That implies that an insider found the current (approximate) price enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Happily, we note that in the last year insiders bought 110.00k shares for a total of HK$1.5m. In the last twelve months there was more buying than selling by Beijing Tong Ren Tang Chinese Medicine insiders. The average buy price was around HK$13.47. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (HK$15.64). The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Beijing Tong Ren Tang Chinese Medicine 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.
Insiders at Beijing Tong Ren Tang Chinese Medicine Have Bought Stock Recently
There was some insider buying at Beijing Tong Ren Tang Chinese Medicine over the last quarter. Yong Ding bought HK$373k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Beijing Tong Ren Tang Chinese Medicine Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own HK$8.3m worth of Beijing Tong Ren Tang Chinese Medicine stock, about 0.07% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.
So What Do The Beijing Tong Ren Tang Chinese Medicine Insider Transactions Indicate?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Beijing Tong Ren Tang Chinese Medicine insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Beijing Tong Ren Tang Chinese Medicine, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.