Even if it's not a huge purchase, we think it was good to see that Shi Shing Ngai, the CEO & Executive Chairman of the Board of Kato (Hong Kong) Holdings Limited (HKG:2189) recently shelled out HK$618k to buy stock, at HK$0.57 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
The Last 12 Months Of Insider Transactions At Kato (Hong Kong) Holdings
In fact, the recent purchase by Shi Shing Ngai was the biggest purchase of Kato (Hong Kong) Holdings shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than HK$0.55 (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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Shi Shing Ngai was the only individual insider to buy shares in the last twelve months.
Shi Shing Ngai purchased 2.12m shares over the year. The average price per share was HK$0.56. 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!
Kato (Hong Kong) Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Kato (Hong Kong) Holdings insiders own about HK$377m worth of shares (which is 69% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Kato (Hong Kong) Holdings Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Kato (Hong Kong) Holdings. That's what I like to see! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for Kato (Hong Kong) Holdings you should be aware of.
But note: Kato (Hong Kong) Holdings 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.