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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 Longfor Group Holdings Limited (HKG:960).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
See our latest analysis for Longfor Group Holdings
Longfor Group Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairperson of the Board Yajun Wu bought HK$200m worth of shares at a price of HK$22.70 per share. We do like to see buying, but this purchase was made at well below the current price of HK$29.15. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 33.9m shares for HK$747m. On the other hand they divested 1.2m shares, for HK$27m. Overall, Longfor Group Holdings insiders were net buyers last year. 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!
Longfor Group Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Longfor Group Holdings Insiders Are Selling The Stock
The last three months saw significant insider selling at Longfor Group Holdings. In total, insiders dumped CN¥6.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Longfor 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. Longfor Group Holdings insiders own 50% of the company, currently worth about HK$88b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.