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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

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.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Yangzijiang Shipbuilding (Holdings)

The Last 12 Months Of Insider Transactions At Yangzijiang Shipbuilding (Holdings)

Over the last year, we can see that the biggest insider sale was by the , Liang Chang, for S$810k worth of shares, at about S$1.62 per share. That means that an insider was selling shares at around the current price of S$1.38. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Liang Chang was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Yangzijiang Shipbuilding (Holdings) Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Yangzijiang Shipbuilding (Holdings) insiders own 7.1% of the company, currently worth about S$385m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.