Multiple insiders secured a larger position in Techtronic Industries Company Limited (HKG:669) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Techtronic Industries
The Last 12 Months Of Insider Transactions At Techtronic Industries
Over the last year, we can see that the biggest insider purchase was by Founder & Group Executive Chairman Horst Julius Pudwill for HK$20m worth of shares, at about HK$81.41 per share. That means that even when the share price was higher than HK$79.45 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid HK$32m for 395.00k shares. But they sold 75.00k shares for HK$7.1m. In total, Techtronic Industries insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Techtronic Industries insiders own 26% of the company, currently worth about HK$37b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Techtronic Industries Insiders?
The fact that there have been no Techtronic Industries insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Techtronic Industries insiders think the business has merit. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Techtronic Industries.
But note: Techtronic Industries 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 of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.