Insider Purchases Worth CN¥73.4m See Losses As Tianli International Holdings Market Value Drops To HK$1.8b
The recent price decline of 21% in Tianli International Holdings Limited's (HKG:1773) stock may have disappointed insiders who bought CN¥73.4m worth of shares at an average price of CN¥2.73 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth CN¥23.5m which is not ideal.
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.
Tianli International Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman & CEO Shi Luo bought HK$10m worth of shares at a price of HK$2.64 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.88). 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 Luo was the only individual insider to buy shares in the last twelve months.
Shi Luo bought a total of 26.88m shares over the year at an average price of HK$2.73. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for Tianli International Holdings
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).
Does Tianli International 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Tianli International Holdings insiders own about HK$832m worth of shares (which is 46% 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 Tianli International Holdings Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Tianli International Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Tianli International Holdings insiders think the business has merit. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Tianli International Holdings.
Of course Tianli International 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.