We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Minmetals Land Limited (HKG:230).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia 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 Minmetals Land
Over the last year, we can see that the biggest insider sale was by Deputy MD & Executive Director Shangping Yang for HK$545k worth of shares, at about HK$1.36 per share. So we know that an insider sold shares at around the present share price of HK$1.36. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price. Shangping Yang was the only individual insider to sell over the last year.
Shangping Yang ditched 800.00k shares over the year. The average price per share was HK$1.37. You can see the insider transactions over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Minmetals Land better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Minmetals Land 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Minmetals Land insiders own 0.2% of the company, worth about HK$7.7m. 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 Minmetals Land Tell Us?
An insider sold Minmetals Land shares recently, but they didn’t buy any. And there weren’t any purchases to give us comfort, over the last year. On the plus side, Minmetals Land makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we’re a little wary. We’d certainly think twice before buying! To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
But note: Minmetals Land 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.