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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Winfull Group Holdings Limited (HKG:183).
What Is Insider Buying?
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Winfull Group Holdings
The Last 12 Months Of Insider Transactions At Winfull Group Holdings
Over the last year, we can see that the biggest insider purchase was by CEO, Compliance Officer Wing Yin Lee for HK$17m worth of shares, at about HK$0.16 per share. That means that an insider was happy to buy shares at above the current price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We generally consider it a positive if insiders have been buying on market, even above the current price.
Happily, we note that in the last year insiders bought 167.50m shares for a total of HK$24m. In the last twelve months there was more buying than selling by Winfull Group Holdings insiders. The average buy price was around HK$0.14. These transactions suggest that insiders have considered the current price of HK$0.11 attractive. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Winfull Group Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Winfull Group Holdings Insiders Bought Stock Recently
Over the last quarter, Winfull Group Holdings insiders have spent a meaningful amount on shares. Executive Chairman Wai San Pong spent HK$6.3m on stock, and there wasn’t any selling. This could be interpreted as suggesting a positive outlook.
Insider Ownership
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. Winfull Group Holdings insiders own 63% of the company, currently worth about HK$398m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.