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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 we'll take a look at whether insiders have been buying or selling shares in Bamboos Health Care Holdings Limited (HKG:2293).
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, rules govern insider transactions, and certain disclosures are required.
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. 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.'
View our latest analysis for Bamboos Health Care Holdings
The Last 12 Months Of Insider Transactions At Bamboos Health Care Holdings
Over the last year, we can see that the biggest insider sale was by the , Chi Hong Kwan, for HK$42m worth of shares, at about HK$1.40 per share. So what is clear is that an insider saw fit to sell at around the current price of HK$1.40. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. The only individual insider seller over the last year was Chi Hong Kwan.
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!
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).
Insider Ownership of Bamboos Health Care Holdings
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Bamboos Health Care Holdings insiders own 68% of the company, worth about HK$378m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Bamboos Health Care Holdings Tell Us?
An insider sold Bamboos Health Care Holdings shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. On the plus side, Bamboos Health Care Holdings makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.