Quite a few insiders have dramatically grown their holdings in Star Plus Legend Holdings Limited (HKG:6683) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Star Plus Legend Holdings
Star Plus Legend Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Yuan Zhang bought HK$213m worth of shares at a price of HK$7.10 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$12.12), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Star Plus Legend Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Star Plus Legend Holdings Have Bought Stock Recently
Over the last quarter, Star Plus Legend Holdings insiders have spent a meaningful amount on shares. Specifically, insider Yuan Zhang bought HK$213m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership Of Star Plus Legend Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Star Plus Legend Holdings insiders own about HK$5.7b worth of shares (which is 56% of the company). 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 Do The Star Plus Legend Holdings Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Star Plus Legend Holdings. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Star Plus Legend Holdings (1 is a bit concerning!) that we believe deserve your full attention.
But note: Star Plus Legend 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.
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.