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 we’ll take a look at whether insiders have been buying or selling shares in PC Partner Group Limited (HKG:1263).
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.
Insider transactions are not the most important thing when it comes to long-term investing.
But logic dictates you should pay some attention to whether insiders are buying or selling shares.
As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At PC Partner Group
Co-Founder Fong Wong made the biggest insider sale in the last 12 months. That single transaction was for HK$3.1m worth of shares at a price of HK$6.16 each.
Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of HK$3.04.
So it may not tell us anything about how insiders feel about the current share price.
We note that in the last year insiders divested 2.52m shares for a total of HK$12m.
In total, PC Partner Group insiders sold more than they bought over the last year.
The sellers received a price of around HK$4.83, on average.
Insider selling doesn’t make us excited to buy.
But we note that the selling, on average, was at well above the recently traded price of HK$3.04.
You can see the insider transactions (by 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at PC Partner Group Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at PC Partner Group.
In total, Fong Wong dumped HK$2.5m worth of shares in that time, and we didn’t record any purchases whatsoever.
In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Does PC Partner Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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.
It’s great to see that PC Partner Group insiders own 50% of the company, worth about HK$577m.
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 PC Partner Group Insiders?
An insider sold stock recently, but they haven’t been buying.
Looking to the last twelve months, our data doesn’t show any insider buying.
On the plus side, PC Partner Group makes money, and is growing profits.
While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
Warren Buffett’s Portfolio: What is he holding?
Get insight into the mind of the most renowned value investor on the planet. Take a look at the portfolio’s top holdings, past performance, how he diversifies his investments, growth estimates and explore investment ideas based on Buffet’s investing methodology. Click here to view a FREE infographic analysis of Warren Buffett’s investment portfolio.