Multiple insiders secured a larger position in Trans-China Automotive Holdings Limited (Catalist:VI2) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Trans-China Automotive Holdings

Trans-China Automotive Holdings Insider Transactions Over The Last Year

The Executive Chairman & CEO Francis Hanjoe Tjia made the biggest insider purchase in the last 12 months. That single transaction was for S$1.5m worth of shares at a price of S$0.26 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$0.19). 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Trans-China Automotive Holdings insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. 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 appears that Trans-China Automotive Holdings insiders own 29% of the company, worth about S$33m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Trans-China Automotive Holdings Insiders?

The fact that there have been no Trans-China Automotive Holdings insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Trans-China Automotive Holdings and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Trans-China Automotive Holdings. Be aware that Trans-China Automotive Holdings is showing 4 warning signs in our investment analysis, and 2 of those are a bit unpleasant...

Of course Trans-China Automotive Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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