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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Yuzhou Properties Company Limited (HKG:1628).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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'.
View our latest analysis for Yuzhou Properties
Yuzhou Properties Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Founder Lung Lam for HK$278m worth of shares, at about HK$3.66 per share. That means that an insider was happy to buy shares at around the current price of HK$3.67. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.
Yuzhou Properties insiders may have bought shares in the last year, but they didn't sell any. Their average price was about HK$3.26. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. 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!
Yuzhou Properties is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Yuzhou Properties
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Yuzhou Properties insiders own 55% of the company, worth about HK$10b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.