We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in China All Access (Holdings) Limited (HKG:633).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
China All Access (Holdings) Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Founder & Executive Chairman, Yuen Chan, sold HK$5.9m worth of shares at a price of HK$0.31 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$0.20. So it may not shed much light on insider confidence at current levels. Yuen Chan was the only individual insider to sell shares in the last twelve months.
Yuen Chan sold a total of 24774000 shares over the year at an average price of CN¥0.31. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of China All Access (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. A high insider ownership often makes company leadership more mindful of shareholder interests. China All Access (Holdings) insiders own about HK$152m worth of shares. That equates to 34% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At China All Access (Holdings) Tell Us?
The fact that there have been no China All Access (Holdings) insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of China All Access (Holdings), we can't say the same about the selling of shares. Along with insider transactions, I recommend checking if China All Access (Holdings) is growing revenue. This free chart of historic revenue and earnings should make that easy.
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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