Have Insiders Been Buying SUNeVision Holdings Ltd. (HKG:1686) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 SUNeVision Holdings Ltd. (HKG:1686).

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, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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 SUNeVision Holdings

The Last 12 Months Of Insider Transactions At SUNeVision Holdings

The CEO & Executive Director Kwok Kong Tong made the biggest insider purchase in the last 12 months. That single transaction was for HK$478k worth of shares at a price of HK$4.78 each. Even though the purchase was made at a significantly lower price than the recent price (HK$8.59), we still think insider buying is a positive. 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.

In the last twelve months insiders purchased 193.00k shares for HK$706k. But insiders sold 93.00k shares worth HK$645k. Overall, SUNeVision Holdings insiders were net buyers during the last year. Their average price was about HK$3.66. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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 always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

SUNeVision Holdings Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at SUNeVision Holdings. In that time, COO & Executive Director Man-yuen Chan dumped HK$645k worth of shares. Meanwhile COO & Executive Director Man-yuen Chan bought HK$228k worth. Generally this level of net selling might be considered a bit bearish.

Insider Ownership of SUNeVision Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. SUNeVision Holdings insiders own about HK$144m worth of shares. That equates to 0.4% of the company. 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 SUNeVision Holdings Insider Transactions Indicate?

Unfortunately, there has been more insider selling of SUNeVision Holdings stock, than buying, in the last three months. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. 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. Our analysis shows 3 warning signs for SUNeVision Holdings (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.

But note: SUNeVision Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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