Need To Know: Link Real Estate Investment Trust (HKG:823) Insiders Have Been Selling Shares

We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Link Real Estate Investment Trust (HKG:823), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

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 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 Link Real Estate Investment Trust

The Last 12 Months Of Insider Transactions At Link Real Estate Investment Trust

The CEO & Executive Director of Link Asset Management Limited, Kwok Lung Hongchoy, made the biggest insider sale in the last 12 months. That single transaction was for HK$74m worth of shares at a price of HK$74.07 each. So what is clear is that an insider saw fit to sell at around the current price of HK$67.95. While insider selling is a negative, to us, it is more negative if the shares are sold 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). Notably Kwok Lung Hongchoy was also the biggest buyer, having purchased HK$11m worth of shares.

In the last twelve months insiders purchased 170.00k shares for HK$11m. But they sold 1.01m shares for HK$74m. In total, Link Real Estate Investment Trust insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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 Link Real Estate Investment Trust better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Link Real Estate Investment Trust

Many investors like to check how much of a company is owned by insiders. 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 appears that Link Real Estate Investment Trust insiders own 0.08% of the company, worth about HK$117m. 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 Link Real Estate Investment Trust Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Link Real Estate Investment Trust shares in the last quarter. While we feel good about high insider ownership of Link Real Estate Investment Trust, we can't say the same about the selling of shares. 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. Every company has risks, and we've spotted 1 warning sign for Link Real Estate Investment Trust you should know about.

Of course Link Real Estate Investment Trust may not be the best stock to buy. So you may wish to see this free collection of high quality 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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