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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 Universal Health International Group Holding Limited (HKG:2211).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 Colombia 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 Universal Health International Group Holding
Universal Health International Group Holding Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Wei Xie for HK$28m worth of shares, at about HK$0.15 per share. So it’s clear an insider wanted to buy, even at a higher 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. Wei Xie was the only individual insider to buy over the year.
You can see the insider transactions over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Universal Health International Group Holding insiders own 30% of the company, currently worth about HK$64m 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.
So What Do The Universal Health International Group Holding Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Universal Health International Group Holding insiders are doubting the company, and they do own shares. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .