Should You Review Recent Insider Transactions At Champion Real Estate Investment Trust (HKG:2778)?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Champion Real Estate Investment Trust (HKG:2778).

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 equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Champion Real Estate Investment Trust

Champion Real Estate Investment Trust Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Chairman of Eagle Asset Management (CP) Limited, Ka Shui Lo, for HK$8.7m worth of shares, at about HK$4.39 per share. That means that an insider was selling shares at slightly below the current price (HK$4.61). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 9.1% of Ka Shui Lo's holding. The only individual insider seller over the last year was Ka Shui Lo. Notably Ka Shui Lo was also the biggest buyer, having purchased HK$2.4m worth of shares.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

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. Insiders own 0.6% of Champion Real Estate Investment Trust shares, worth about HK$178m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Champion Real Estate Investment Trust Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Champion Real Estate Investment Trust shares in the last quarter. While we feel good about high insider ownership of Champion Real Estate Investment Trust, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Champion Real Estate Investment Trust. While conducting our analysis, we found that Champion Real Estate Investment Trust has 1 warning sign and it would be unwise to ignore this.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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