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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Loco Hong Kong Holdings Limited (HKG:8162).
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, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Loco Hong Kong Holdings
The Last 12 Months Of Insider Transactions At Loco Hong Kong Holdings
Over the last year, we can see that the biggest insider purchase was by Fong Chu for HK$11m worth of shares, at about HK$0.24 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.50), we still think insider buying is a positive. But because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 91.0m shares worth HK$22m. In the last twelve months Loco Hong Kong Holdings insiders were buying shares, but not selling. 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!
Loco Hong Kong Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Loco Hong Kong Holdings Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Loco Hong Kong Holdings insiders own about HK$84m worth of shares. That equates to 29% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.