We often see insiders buying back shares of companies that are performing well over the long term. The flip side is that there are more than a few examples of insiders throwing stocks ahead of a period of poor performance. So before you buy or sell Tian Ge Interactive Holdings Limited (HKG: 1980), you might want to know if any insiders bought or sold.

What is an insider?

It is perfectly legal for company insiders, including members of the board of directors, to buy and sell shares in a company. However, these insiders should disclose their trading activities and not trade on the basis of inside information.

We don’t believe shareholders should just follow insider trading. But logic dictates that you pay attention to whether insiders are buying or selling stocks. For example, a Harvard university study found that “insider buying generates abnormal returns of over 6% per year”.

Check out our latest analysis for Tian Ge Interactive Holdings

The Last 12 Months of Insider Trading at Tian Ge Interactive Holdings

The biggest insider buy in the past twelve months was when Executive Chairman Zhengjun Fu bought HK $ 11 million worth of shares at a price of HK $ 0.75 per share. While we love to see insider buys, we note that this significant buy was significantly lower than the recent HK $ 1.05 price tag. While it does suggest that insiders view the stock as undervalued at lower prices, this trade doesn’t tell us much about what they think about current prices.

Zhengjun Fu bought 19.00 million shares during the year. The average price per share was HK $ 0.76. The chart below shows insider trading (by companies and individuals) over the past year. If you click on the chart, you can see all of the individual trades including the stock price, individual and date!

There are many other companies that have insiders who buy stocks. You probably do do not want to miss it free list of growing companies that insiders buy.

Does Tian Ge Interactive Holdings Have Strong Insider Ownership?

Another way to test the alignment between a company’s executives and other shareholders is to look at how many shares they own. Strong insider ownership often makes company management more concerned with the interests of shareholders. Insiders own 26% of shares in Tian Ge Interactive Holdings, worth around HK $ 348 million. This level of insider ownership is good but just short of being particularly noteworthy. It certainly suggests a reasonable degree of alignment.

So what do Tian Ge Interactive Holdings’ insider trading indicate?

We certainly don’t mind the fact that there hasn’t been any insider trading from Tian Ge Interactive Holdings recently. However, our analysis of transactions over the past year is encouraging. It would be great to see more insider buying, but overall it looks like the insiders at Tian Ge Interactive Holdings are reasonably well aligned (owning a significant share of the company’s stock) and optimistic for the future. . In addition to knowing the current insider transactions, it is useful to identify the risks Tian Ge Interactive Holdings faces. Be aware that Tian Ge Interactive Holdings shows 2 warning signs in our investment analysis, and 1 of them doesn’t go too well with us …

Of course Tian Ge Interactive Holdings may not be the best stock to buy. So you might want to see this free collection of high quality businesses.

For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
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