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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in On Real International Holdings Limited (HKG:8245).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 On Real International Holdings
On Real International Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Executive Director & CEO, Wing Ki Tam, for HK$6.5m worth of shares, at about HK$0.045 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.031). So it is hard to draw any strong conclusion from it. Wing Ki Tam was the only individual insider to sell shares in the last twelve months. Notably Wing Ki Tam was also the biggest buyer, having purchased HK$8.8m worth of shares.
Wing Ki Tam purchased 156.3m shares over the year. The average price per share was HK$0.056. 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).
Insiders at On Real International Holdings Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at On Real International Holdings. In total, Executive Director & CEO Wing Ki Tam dumped HK$6.5m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of On Real International Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that On Real International Holdings insiders own 51% of the company, worth about HK$63m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.