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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 China Overseas Land & Investment Limited (HKG:688).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
See our latest analysis for China Overseas Land & Investment
The Last 12 Months Of Insider Transactions At China Overseas Land & Investment
In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, Lai-Tai Fan Hsu, sold HK$691k worth of shares at a price of HK$28.80 per share. So what is clear is that an insider saw fit to sell at around the current price of HK$27.90. While we don't usually like to see insider selling, it's more concerning if the sales take place 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). Lai-Tai Fan Hsu was the only individual insider to sell shares in the last twelve months. Notably Lai-Tai Fan Hsu was also the biggest buyer, having purchased HK$860k worth of shares.
Lai-Tai Fan Hsu purchased 30.00k shares over the year. The average price per share was HK$28.65. The chart below shows insider transactions (by 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. 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).
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that China Overseas Land & Investment insiders own 0.05% of the company, worth about HK$148m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.