We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Prosperity International Holdings (H.K.) Limited (HKG:803), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
Prosperity International Holdings (H.K.) Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Yuhua Wang for HK$12m worth of shares, at about HK$0.071 per share. So it's clear an insider wanted to buy, at around the current price, which is HK$0.088. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Prosperity International Holdings (H.K.) share holders is that insiders were buying at near the current price.
In the last twelve months insiders purchased 322.16m shares for HK$25m. On the other hand they divested 84625070 shares, for HK$6.3m. Overall, Prosperity International Holdings (H.K.) insiders were net buyers last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Prosperity International Holdings (H.K.) insiders own 51% of the company, worth about HK$62m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Prosperity International Holdings (H.K.) Insider Transactions Indicate?
The fact that there have been no Prosperity International Holdings (H.K.) insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Prosperity International Holdings (H.K.) insiders feel good about the company's future. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
But note: Prosperity International Holdings (H.K.) 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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