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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell China Lesso Group Holdings Limited (HKG:2128), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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.’
Check out our latest analysis for China Lesso Group Holdings
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The Last 12 Months Of Insider Transactions At China Lesso Group Holdings
In the last twelve months, the biggest single purchase by an insider was when Founder & Chairman Luen Wong bought HK$11m worth of shares at a price of HK$5.68 per share. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 4.80m shares worth HK$26m. In the last twelve months there was more buying than selling by China Lesso Group Holdings insiders. The average buy price was around HK$5.52. This is nice to see since it implies that insiders might see value around current prices (around HK$4.38). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does China Lesso Group Holdings Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. China Lesso Group Holdings insiders own about HK$9.2b worth of shares (which is 69% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.