Founder of Luk Fook Holdings (International) Wai Sheung Wong Buys 4.4% More Shares

Those following along with Luk Fook Holdings (International) Limited (HKG:590) will no doubt be intrigued by the recent purchase of shares by Wai Sheung Wong, Founder of the company, who spent a stonking HK$6.5m on stock at an average price of HK$15.31. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 4.4%.

View our latest analysis for Luk Fook Holdings (International)

The Last 12 Months Of Insider Transactions At Luk Fook Holdings (International)

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Hon Hung Li for HK$11m worth of shares, at about HK$17.98 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$15.72). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid HK$26m for 1.54m shares. But they sold 53.42k shares for HK$1.2m. Overall, Luk Fook Holdings (International) insiders were net buyers during the last year. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Luk Fook Holdings (International) insiders own 2.2% of the company, worth about HK$207m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Luk Fook Holdings (International) Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Luk Fook Holdings (International). Looks promising! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 1 warning sign for Luk Fook Holdings (International) that deserve your attention before buying any shares.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com