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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 shareholders might well want to know whether insiders have been buying or selling shares in HC Group Inc. (HKG:2280).
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 HC Group
The Last 12 Months Of Insider Transactions At HC Group
The insider, Jiang Guo, made the biggest insider sale in the last 12 months. That single transaction was for HK$120m worth of shares at a price of HK$3.42 each. So what is clear is that an insider saw fit to sell at around the current price of HK$2.87. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. The only individual insider seller over the last year was Jiang Guo.
Over the last year, we can see that insiders have bought 2850000 shares worth HK$10m. But insiders sold 72281000 shares worth HK$195m. Jiang Guo ditched 72281000 shares over the year. The average price per share was CN¥2.69. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
HC Group Insiders Bought Stock Recently
Over the last quarter, HC Group insiders have spent a meaningful amount on shares. Chairman & Compliance Officer Jun Liu spent CN¥870k on stock, and there wasn't any selling. That shows some optimism about the company's future.
Does HC Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that HC Group insiders own 24% of the company, worth about HK$762m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.