We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Wah Ha Realty Company Limited (HKG:278).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
View our latest analysis for Wah Ha Realty
Wah Ha Realty Insider Transactions Over The Last Year
While no particular insider transaction stood out, we can still look at the overall trading.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insider Ownership of Wah Ha Realty
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Wah Ha Realty insiders own 50% of the company, worth about HK$476m. 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 Do The Wah Ha Realty Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Wah Ha Realty insiders are well aligned, and quite possibly think the share price is too low. Looks promising! I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: Wah Ha Realty 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.