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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 we'll take a look at whether insiders have been buying or selling shares in Royal Century Resources Holdings Limited (HKG:8125).
What Is Insider Selling?
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, such insiders must disclose their trading activities, and not trade on inside information.
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. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for Royal Century Resources Holdings
The Last 12 Months Of Insider Transactions At Royal Century Resources Holdings
In the last twelve months, the biggest single sale by an insider was when the , Zheng Juhua, sold HK$12m worth of shares at a price of HK$0.35 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$0.081). So it is hard to draw any strong conclusion from it. Zheng Juhua was the only individual insider to sell over the last year.
Zheng Juhua ditched 81.4m shares over the year. The average price per share was HK$0.26. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Royal Century Resources Holdings Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Royal Century Resources Holdings insiders own about HK$15m worth of shares. That equates to 34% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.