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We often see insiders buying up shares in companies that perform well over the long term. 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 EcoGreen International Group Limited (HKG:2341).
Do Insider Transactions Matter?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
View our latest analysis for EcoGreen International Group
EcoGreen International Group Insider Transactions Over The Last Year
Founder Yirong Yang made the biggest insider purchase in the last 12 months. That single transaction was for HK$3.3m worth of shares at a price of HK$1.64 each. 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. It’s not at all bad to see insiders buy shares at or above current prices. The only individual insider to buy over the last year was Yirong Yang.
Yirong Yang purchased 15.41m shares over the year. The average price per share was HK$1.64. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
EcoGreen International Group 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 of EcoGreen International Group
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. EcoGreen International Group insiders own 50% of the company, currently worth about HK$608m 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.