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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 shareholders might well want to know whether insiders have been buying or selling shares in China Aircraft Leasing Group Holdings Limited (HKG:1848).
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 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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for China Aircraft Leasing Group Holdings
China Aircraft Leasing Group Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Chairman Shuang Chen sold HK$804k worth of shares at a price of HK$8.04 per share. So we know that an insider sold shares at around the present share price of HK$7.87. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price. The only individual insider seller over the last year was Shuang Chen. Notably Shuang Chen was also the biggest buyer, having purchased HK$803k worth of shares.
The chart below shows insider transactions 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!
I will like China Aircraft Leasing Group Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of China Aircraft Leasing Group Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. China Aircraft Leasing Group Holdings insiders own about HK$205m worth of shares (which is 3.8% 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.