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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 Yangtzekiang Garment Limited (HKG:294).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.
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Yangtzekiang Garment Insider Transactions Over The Last Year
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
Wing Chan bought a total of 475.00k shares over the year at an average price of HK$3.03. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Yangtzekiang Garment 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.
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. Insiders own 23% of Yangtzekiang Garment shares, worth about HK$158m. 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 Do The Yangtzekiang Garment Insider Transactions Indicate?
It is good to see recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Yangtzekiang Garment insiders are well aligned, and quite possibly think the share price is too low. Nice! Along with insider transactions, I recommend checking if Yangtzekiang Garment is growing revenue. This free chart of historic revenue and earnings should make that easy.