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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Yeebo (International Holdings) Limited (HKG:259).
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 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 Yeebo (International Holdings)
The Last 12 Months Of Insider Transactions At Yeebo (International Holdings)
Notably, that recent purchase by CEO & Executive Director Kwok Wai Li was not the only time they bought Yeebo (International Holdings) shares this year. Earlier in the year, they paid HK$1.10 per share in a HK$53m purchase. That means that an insider was happy to buy shares at around the current price of HK$1.13. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Yeebo (International Holdings) share holders is that an insider was buying at near the current price. Kwok Wai Li was the only individual insider to buy shares in the last twelve months.
Kwok Wai Li bought a total of 55.27m shares over the year at an average price of HK$1.11. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Yeebo (International 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
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Yeebo (International Holdings) insiders own 17% of the company, worth about HK$184m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.