We often see insiders buying up shares in companies that perform well over the long term. 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 Orient Victory Travel Group Company Limited (HKG:265).

What Is Insider Buying?

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 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. 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'.

See our latest analysis for Orient Victory Travel Group

The Last 12 Months Of Insider Transactions At Orient Victory Travel Group

The Chairman & CEO, Baodong Shi, made the biggest insider sale in the last 12 months. That single transaction was for HK$23m worth of shares at a price of HK$0.15 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$0.12). So it is hard to draw any strong conclusion from it. Baodong Shi was the only individual insider to sell shares in the last twelve months. Notably Baodong Shi was also the biggest buyer, having purchased HK$25m worth of shares.

Baodong Shi purchased 172.2m shares over the year. The average price per share was HK$0.14. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Does Orient Victory Travel Group Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Orient Victory Travel Group insiders own about HK$950m worth of shares (which is 61% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.