Quite a few insiders have dramatically grown their holdings in Lai Sun Development Company Limited (HKG:488) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Lai Sun Development Insider Transactions Over The Last Year
The insider Siu Yuk Yu made the biggest insider purchase in the last 12 months. That single transaction was for HK$11m worth of shares at a price of HK$0.59 each. That implies that an insider found the current price of HK$0.63 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Lai Sun Development insiders decided to buy shares at close to current prices.
While Lai Sun Development insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and 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!
Check out our latest analysis for Lai Sun Development
Lai Sun Development is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 24% of Lai Sun Development shares, worth about HK$222m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Lai Sun Development Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Lai Sun Development insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lai Sun Development. Every company has risks, and we've spotted 1 warning sign for Lai Sun Development you should know about.
But note: Lai Sun Development may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.