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 shareholders might well want to know whether insiders have been buying or selling shares in G.A. Holdings Limited (HKG:8126).
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.
Insider transactions are not the most important thing when it comes to long-term investing. 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.’
G.A. Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Hui-Chuan Szu for HK$16m worth of shares, at about HK$0.40 per share. So it’s clear an insider wanted to buy, at around the current price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
Happily, we note that in the last year insiders paid HK$16m for 39.95m shares. But they sold 24.70m for HK$10m. In total, G.A. Holdings insiders bought more than they sold over the last year. The average buy price was around HK$0.40. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of HK$0.45. You can see a visual depiction of insider transactions (by 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 G.A. Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
G.A. Holdings Insiders Are Selling The Stock
The last three months saw significant insider selling at G.A. Holdings. In total, Hing Ka Chan dumped HK$479k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of G.A. Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 19% of G.A. Holdings shares, worth about HK$41m. 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 Does This Data Suggest About G.A. Holdings Insiders?
An insider hasn’t bought G.A. Holdings stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So we’re happy enough to look past some selling. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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 firstname.lastname@example.org. 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.