Have Insiders Been Buying Xinyi Solar Holdings Limited (HKG:968) Shares This Year?

By
Simply Wall St
Published
March 02, 2021
SEHK:968

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Xinyi Solar Holdings Limited (HKG:968).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia 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'.

See our latest analysis for Xinyi Solar Holdings

Xinyi Solar Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman Yin Yee Lee for HK$4.3m worth of shares, at about HK$4.28 per share. We do like to see buying, but this purchase was made at well below the current price of HK$17.06. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SEHK:968 Insider Trading Volume March 2nd 2021

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Xinyi Solar Holdings

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Xinyi Solar Holdings insiders own about HK$37b worth of shares (which is 26% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Xinyi Solar Holdings Insiders?

The fact that there have been no Xinyi Solar Holdings insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Xinyi Solar Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While we like knowing 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. While conducting our analysis, we found that Xinyi Solar Holdings has 3 warning signs and it would be unwise to ignore these.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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