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 Yu Tak International Holdings Limited (HKG:8048), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Yu Tak International Holdings Insider Transactions Over The Last Year
Chairman Yu Ping Chong made the biggest insider purchase in the last 12 months. That single transaction was for HK$609k worth of shares at a price of HK$0.08 each. We do like to see buying, but this purchase was at a lower price. The purchase might not be the best indicator of confidence in the current valuation.
Yu Ping Chong purchased 19.48m shares over the year. The average price per share was HK$0.082. The chart below shows insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Yu Tak International Holdings
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 11% of Yu Tak International Holdings shares, worth about HK$23m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Do The Yu Tak International Holdings Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But the net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Yu Tak International Holdings and their transactions don’t cause us concern. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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.
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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.