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Insiders who bought XPeng Inc. (NYSE:XPEV) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$1.4b as a result of the stock's 11% gain over the same period. Put another way, the original CN¥9.97m acquisition is now worth CN¥20.1m.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for XPeng
The Last 12 Months Of Insider Transactions At XPeng
In the last twelve months, the biggest single purchase by an insider was when Co-Founder Xiaopeng He bought US$10.0m worth of shares at a price of US$7.02 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$14.13. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does XPeng 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that XPeng insiders own 23% of the company, worth about US$2.8b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The XPeng Insider Transactions Indicate?
The fact that there have been no XPeng insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like XPeng insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for XPeng you should know about.