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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 before you buy or sell Kangda International Environmental Company Limited (HKG:6136), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Kangda International Environmental
The Last 12 Months Of Insider Transactions At Kangda International Environmental
Over the last year, we can see that the biggest insider purchase was by Sizhen Zhao for HK$1.4m worth of shares, at about HK$1.39 per share. That means that even when the share price was higher, an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price. The only individual insider to buy over the last year was Sizhen Zhao.
Sizhen Zhao bought 1.41m shares over the last 12 months at an average price of HK$1.39. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Kangda International Environmental 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Kangda International Environmental insiders own 56% of the company, currently worth about HK$1.4b 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.
What Might The Insider Transactions At Kangda International Environmental Tell Us?
The fact that there have been no Kangda International Environmental insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Kangda International Environmental insiders feel good about the company’s future. Of course, the future is what matters most. So if you are interested in Kangda International Environmental, you should check out this free report on analyst forecasts for the company.