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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 we'll take a look at whether insiders have been buying or selling shares in Lap Kei Engineering (Holdings) Limited (HKG:1690).
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, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'
Check out our latest analysis for Lap Kei Engineering (Holdings)
Lap Kei Engineering (Holdings) Insider Transactions Over The Last Year
In fact, the recent purchase by Executive Chairman Kang Kwong Wong was not their only acquisition of Lap Kei Engineering (Holdings) shares this year. Earlier in the year, they paid HK$0.16 per share in a HK$2.0m purchase. That means that an insider was happy to buy shares at above the current price of HK$0.15. 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Kang Kwong Wong was the only individual insider to buy shares in the last twelve months.
Kang Kwong Wong bought a total of 60.5m shares over the year at an average price of HK$0.17. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Lap Kei Engineering (Holdings) is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Lap Kei Engineering (Holdings)
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 5.3% of Lap Kei Engineering (Holdings) shares, worth about HK$11m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.