Those following along with Geely Automobile Holdings Limited (HKG:175) will no doubt be intrigued by the recent purchase of shares by Dong Hui Li, Executive Vice Chairman of the company, who spent a stonking HK$9.5m on stock at an average price of HK$19.09. While that only increased their holding size by 6.4%, it is still a big swing by our standards.
Geely Automobile Holdings Insider Transactions Over The Last Year
In fact, the recent purchase by Executive Vice Chairman Dong Hui Li was not their only acquisition of Geely Automobile Holdings shares this year. They previously made an even bigger purchase of HK$13m worth of shares at a price of HK$20.88 per share. That means that an insider was happy to buy shares at above the current price of HK$18.41. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Dong Hui Li.
Dong Hui Li purchased 3.20m shares over the year. The average price per share was HK$19.93. 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!
Check out our latest analysis for Geely Automobile 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).
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Geely Automobile Holdings insiders own 2.4% of the company, currently worth about HK$4.8b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Geely Automobile Holdings Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Geely Automobile Holdings insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. Every company has risks, and we’ve spotted 1 warning sign for Geely Automobile Holdings you should know about.
Of course Geely Automobile 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.