Some of the losses seen by insiders who purchased HK$56.3m worth of Kwan On Holdings Limited (HKG:1559) shares over the past year were recovered after the stock increased by 18% over the past week. However, total losses seen by insiders are still HK$8.8m since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Kwan On Holdings Insider Transactions Over The Last Year
The insider Jinhua Ren made the biggest insider purchase in the last 12 months. That single transaction was for HK$45m worth of shares at a price of HK$0.07 each. That means that an insider was happy to buy shares at above the current price of HK$0.059. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 804.15m shares for HK$56m. On the other hand they divested 57.45m shares, for HK$2.9m. In total, Kwan On Holdings insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for Kwan On Holdings
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Kwan On Holdings Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Kwan On Holdings insiders own about HK$106m worth of shares (which is 65% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Kwan On Holdings Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Kwan On Holdings insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for Kwan On Holdings you should be aware of, and 2 of these can't be ignored.
Of course Kwan On Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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