Want to participate in a research study? Help shape the future of investing tools and earn a $60 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 before you buy or sell Tenfu (Cayman) Holdings Company Limited (HKG:6868), you may well want to know whether insiders have been buying or selling.

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.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Tenfu (Cayman) Holdings

The Last 12 Months Of Insider Transactions At Tenfu (Cayman) Holdings

Co-Founder Chia Lee made the biggest insider purchase in the last 12 months. That single transaction was for HK$47m worth of shares at a price of HK$5.30 each. That means that even when the share price was higher than HK$5.18 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay 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. Chia Lee was the only individual insider to buy over the year.

You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Tenfu (Cayman) Holdings insiders own 53% of the company, worth about HK$3.3b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.