It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in COSCO SHIPPING Ports Limited (HKG:1199).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.
COSCO SHIPPING Ports Insider Transactions Over The Last Year
Vice Chairman & MD Wei Zhang made the biggest insider purchase in the last 12 months. That single transaction was for HK$1.4m worth of shares at a price of HK$7.13 each. That implies that an insider found the current (approximate) price enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
In the last twelve months insiders paid HK$3.7m for 524.58k shares purchased. In the last twelve months there was more buying than selling by COSCO SHIPPING Ports insiders. They paid about HK$7.10 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of HK$7.89. The chart below shows insider transactions (by individuals) over the last year. 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.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own HK$8.6m worth of COSCO SHIPPING Ports stock, about 0.04% of the company. We prefer to see high levels of insider ownership.
So What Do The COSCO SHIPPING Ports Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think COSCO SHIPPING Ports insiders are doubting the company. Of course, the future is what matters most. So if you are interested in COSCO SHIPPING Ports, you should check out this free report on analyst forecasts for the company.
Of course COSCO SHIPPING Ports may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.