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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell
Risecomm Group Holdings Limited
(
HKG:1679
), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University
study
found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for Risecomm Group Holdings
The Last 12 Months Of Insider Transactions At Risecomm Group Holdings
Over the last year, we can see that the biggest insider sale was by Junling Chen for HK$79m worth of shares, at about HK$1.10 per share. That means that even when the share price was below the current price of HK$1.72, an insider wanted to cash in some shares. While their view may have changed since they sold, this isn’t a particularly bullish sign. As a general rule we consider it to be discouraging when insiders are selling below the current price. Please note, however, that this single sale was just 42.5% of Junling Chen’s stake. Junling Chen was the only individual insider to sell shares in the last twelve months.
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!
SEHK:1679 Insider Trading February 1st 19
If you like to buy stocks alongside management, then you might just love this
free
list of companies. (Hint: insiders have been buying them).
Insider Ownership of Risecomm Group Holdings
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 24% of Risecomm Group Holdings shares, worth about HK$334m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
Story continues
So What Does This Data Suggest About Risecomm Group Holdings Insiders?
The fact that there have been no Risecomm Group Holdings insider transactions recently certainly doesn’t bother us. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of Risecomm Group Holdings insider transactions don’t fill us with confidence. 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
.
Of course
Risecomm Group Holdings may not be the best stock to buy
. So you may wish to see this
free
collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at
.
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