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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 Xi’an Haitiantian Holdings Co., Ltd. (HKG:8227).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Check out our latest analysis for Xi’an Haitiantian Holdings
Xi’an Haitiantian Holdings Insider Transactions Over The Last Year
Jin Zhou made the biggest insider sale in the last 12 months. That single transaction was for HK$112m worth of shares at a price of HK$3.01 each. That means that an insider was selling shares at around the current price of HK$2.64. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. The only individual insider seller over the last year was Jin Zhou.
Jin Zhou ditched 39.44m shares over the year. The average price per share was CN¥3.03. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Xi’an Haitiantian 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Xi’an Haitiantian Holdings insiders own 14% of the company, worth about HK$543m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.