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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 SmarTone Telecommunications Holdings Limited (HKG:315), 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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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 SmarTone Telecommunications Holdings
The Last 12 Months Of Insider Transactions At SmarTone Telecommunications Holdings
In the last twelve months, the biggest single purchase by an insider was when Chairman Ping-luen Kwok bought HK$460k worth of shares at a price of HK$9.13 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$6.14). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Ping-luen Kwok was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 of SmarTone Telecommunications Holdings
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests SmarTone Telecommunications Holdings insiders own 0.5% of the company, worth about HK$35m. We prefer to see high levels of insider ownership.