Gemdale Properties and Investment Corporation Limited (HKG:535) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 16%, resulting in a HK$665m rise in the company's market capitalisation, translating to a gain of 14% on their initial investment. In other words, the original CN¥2.83m purchase is now worth CN¥3.25m.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Gemdale Properties and Investment
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Lian Huat Loh for HK$2.6m worth of shares, at about HK$0.26 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$0.29), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Gemdale Properties and Investment insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Gemdale Properties and Investment is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Gemdale Properties and Investment insiders own 3.3% of the company, worth about HK$154m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Gemdale Properties and Investment Insiders?
The fact that there have been no Gemdale Properties and Investment insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Gemdale Properties and Investment insiders feel good about the company's future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 4 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in Gemdale Properties and Investment.
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.