Insiders' HK$355.5m Investments In Red Following Sinopros' HK$64m Dip In Market Value
Insiders who bought HK$355.5m worth of Sinopros Corporation Limited's (HKG:727) stock at an average buy price of HK$0.65 over the last year may be disappointed by the recent 11% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth HK$209.7m, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Sinopros
In the last twelve months, the biggest single purchase by an insider was when insider Tianfeng Lan bought HK$195m worth of shares at a price of HK$0.65 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.39). 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. In our view, the price an insider pays for shares is very important. 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 Sinopros insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Sinopros
Sinopros is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Sinopros insiders own 51% of the company, worth about HK$252m. 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 Sinopros Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Sinopros shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Sinopros insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 4 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in Sinopros.
Of course Sinopros 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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