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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. 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 before you buy or sell Yantai North Andre Juice Company Limited (HKG:2218), you may well want to know whether insiders have been buying or selling.
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
Check out our latest analysis for Yantai North Andre Juice
The Last 12 Months Of Insider Transactions At Yantai North Andre Juice
In the last twelve months, the biggest single purchase by an insider was when insider Zhi Long Ni bought HK$417k worth of shares at a price of HK$5.80 per share. That means that an insider was happy to buy shares at above the current price of HK$5.64. 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 always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Zhi Long Ni was the only individual insider to buy over the year.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Yantai North Andre Juice 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 Yantai North Andre Juice
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 appears that Yantai North Andre Juice insiders own 19% of the company, worth about HK$387m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.