In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
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 Orange Sky Golden Harvest Entertainment (Holdings) Limited (HKG:1132).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 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.'
See our latest analysis for Orange Sky Golden Harvest Entertainment (Holdings)
The Last 12 Months Of Insider Transactions At Orange Sky Golden Harvest Entertainment (Holdings)
Over the last year, we can see that the biggest insider purchase was by Chairman of the Board Wu Kebo for HK$6.2m worth of shares, at about HK$0.31 per share. That means that an insider was happy to buy shares at above the current price of HK$0.24. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Wu Kebo was the only individual insider to buy over the year.
Wu Kebo bought a total of 22.1m shares over the year at an average price of HK$0.31. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Orange Sky Golden Harvest Entertainment (Holdings) insiders own 45% of the company, currently worth about HK$308m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.