Potential Luk Fook Holdings (International) Limited (HKG:590) shareholders may wish to note that the Founder, Wai Sheung Wong, recently bought HK$2.4m worth of stock, paying HK$14.87 for each share. Although the purchase only increased their holding by 1.3%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Luk Fook Holdings (International)
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Hon Hung Li bought HK$11m worth of shares at a price of HK$17.98 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$15.32). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for 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.
Luk Fook Holdings (International) insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around HK$15.73. This is nice to see since it implies that insiders might see value around current prices. 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!
See our latest analysis for Luk Fook Holdings (International)
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does Luk Fook Holdings (International) 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. Insiders own 2.7% of Luk Fook Holdings (International) shares, worth about HK$243m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Luk Fook Holdings (International) Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Luk Fook Holdings (International) insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Luk Fook Holdings (International) you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.