Insider Buying: The Melco International Development Limited (HKG:200) Chairman & CEO Just Bought HK$10m Worth Of Shares

Melco International Development Limited (HKG:200) shareholders (or potential shareholders) will be happy to see that the Chairman & CEO, Yau Lung Ho, recently bought a whopping HK$10m worth of stock, at a price of HK$10.92. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.2%.

See our latest analysis for Melco International Development

Melco International Development Insider Transactions Over The Last Year

In fact, the recent purchase by Yau Lung Ho was the biggest purchase of Melco International Development shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of HK$11.40. 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 Melco International Development share holders is that an insider was buying at near the current price. Yau Lung Ho was the only individual insider to buy shares in the last twelve months.

Yau Lung Ho bought a total of 1.24m shares over the year at an average price of HK$10.93. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Melco International Development is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Melco International Development insiders own about HK$6.4b worth of shares (which is 36% 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 Do The Melco International Development Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Melco International Development insiders are well aligned, and quite possibly think the share price is too low. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Melco International Development. Our analysis shows 2 warning signs for Melco International Development (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

Of course Melco International Development 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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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