Investors who take an interest in Far East Consortium International Limited (HKG:35) should definitely note that the Chairman & CEO, Tat Cheong Chiu, recently paid HK$1.40 per share to buy HK$2.2m worth of the stock. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.
Check out our latest analysis for Far East Consortium International
Far East Consortium International Insider Transactions Over The Last Year
In fact, the recent purchase by Chairman & CEO Tat Cheong Chiu was not their only acquisition of Far East Consortium International shares this year. They previously made an even bigger purchase of HK$95m worth of shares at a price of HK$1.71 per share. That means that even when the share price was higher than HK$1.37 (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. 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.
Over the last year, we can see that insiders have bought 85.16m shares worth HK$145m. But insiders sold 1.05m shares worth HK$1.4m. Overall, Far East Consortium International insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Far East Consortium International is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Far East Consortium International insiders own about HK$2.0b worth of shares (which is 54% 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 Does This Data Suggest About Far East Consortium International Insiders?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Far East Consortium International. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Far East Consortium International. Our analysis shows 3 warning signs for Far East Consortium International (2 shouldn't be ignored!) and we strongly recommend you look at these before investing.
But note: Far East Consortium International 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.