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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. 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 we’ll take a look at whether insiders have been buying or selling shares in Leoch International Technology Limited (HKG:842).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
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.’
Check out our latest analysis for Leoch International Technology
Leoch International Technology Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Founder & Chairman Li Dong for HK$1.2m worth of shares, at about HK$1.24 per share. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices. Li Dong was the only individual insider to buy over the year.
Li Dong bought 4.00m shares over the last 12 months at an average price of HK$0.99. 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!
I will like Leoch International Technology better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Leoch International Technology Boast High 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. We usually like to see fairly high levels of insider ownership. Leoch International Technology insiders own about HK$604m worth of shares (which is 74% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.