Far East Consortium International Limited (HKG:35) shareholders (or potential shareholders) will be happy to see that the Chairman & CEO, Tat Cheong Chiu, recently bought a whopping HK$29m worth of stock, at a price of HK$1.35. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 1.4%.
The Last 12 Months Of Insider Transactions At Far East Consortium International
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$1.19 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid HK$200m for 127.08m shares. But insiders sold 2.46m shares worth HK$3.3m. Overall, Far East Consortium International insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and 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!
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 Of Far East Consortium International
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Far East Consortium International insiders own 53% of the company, currently worth about HK$1.8b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Far East Consortium International Tell Us?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Far East Consortium International insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! While we like knowing 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. When we did our research, we found 3 warning signs for Far East Consortium International (1 makes us a bit uncomfortable!) that we believe deserve your full attention.
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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
