We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in S.A.S. Dragon Holdings Limited (HKG:1184).

What Is Insider Buying?

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, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 S.A.S. Dragon Holdings

S.A.S. Dragon Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Founder Yuk-Lun Yim bought HK$5.5m worth of shares at a price of HK$2.61 per share. That means that even when the share price was higher, an insider wanted to purchase shares. 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. That purchase may suggest an expectation of positive returns over the long term. Yuk-Lun Yim was the only individual insider to buy shares in the last twelve months.

Yuk-Lun Yim bought 12.52m shares over the last 12 months at an average price of HK$2.56. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that S.A.S. Dragon Holdings insiders own 49% of the company, worth about HK$740m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The S.A.S. Dragon Holdings Insider Transactions Indicate?

It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest S.A.S. Dragon Holdings insiders are well aligned, and quite possibly think the share price is too low. Looks promising! Along with insider transactions, I recommend checking if S.A.S. Dragon Holdings is growing revenue. This free chart of historic revenue and earnings should make that easy.

But note: S.A.S. Dragon Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.