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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Shanghai Industrial Holdings Limited (HKG:363), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. 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 Shanghai Industrial Holdings
The Last 12 Months Of Insider Transactions At Shanghai Industrial Holdings
Over the last year, we can see that the biggest insider purchase was by Vice Chairman & CEO Jun Zhou for HK$1.6m worth of shares, at about HK$15.40 per share. So it's clear an insider wanted to buy, at around the current price, which is HK$18.26. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Shanghai Industrial Holdings insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Jun Zhou.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Shanghai Industrial Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Shanghai Industrial Holdings Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our information indicates that Shanghai Industrial Holdings insiders own about HK$5.5m worth of shares. However, it's possible that insiders might have an indirect interest through a more complex structure. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.