Rici Healthcare Holdings Limited (HKG:1526) shareholders (or potential shareholders) will be happy to see that the VP & Executive Director, Hong Mei, recently bought a whopping HK$15m worth of stock, at a price of HK$1.15. While that only increased their holding size by 1.3%, it is still a big swing by our standards.
See our latest analysis for Rici Healthcare Holdings
Rici Healthcare Holdings Insider Transactions Over The Last Year
In fact, the recent purchase by VP & Executive Director Hong Mei was not their only trade of Rici Healthcare Holdings shares this year. Earlier in the year, they sold shares at a price ofHK$0.95 per share in a -HK$173m transaction. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$1.17. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 16% of Hong Mei's stake.
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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Does Rici Healthcare Holdings Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Rici Healthcare Holdings insiders own 60% of the company, currently worth about HK$1.1b based on the recent share price. 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 Rici Healthcare Holdings Insider Transactions Indicate?
The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Rici Healthcare Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.