After buying 2.4 billion Canadian yen worth of Haidilao International Holding Ltd. (HKG:6862), the recent pullback of 6.5% is not what insiders might have expected.


Insiders who acquired for 2.4 billion Canadian yen of Haidilao International Holding Ltd. (HKG:6862) at an average price of ¥20.47 CN over the past 12 months might be dismayed by the recent price drop of 6.5%. Insiders invest in the hope that their money will increase in value over time. However, following recent losses, their initial investment is now worth only 2.0 billion Canadian yen, which is not what they expected.

While insider trading isn’t the most important thing when it comes to long-term investing, logic dictates that you should pay attention to whether insiders are buying or selling stocks.

Check out our latest analysis for Haidilao International Holding

Haidilao International holds insider trading over the past year

In the past twelve months, the largest single insider sale occurred when insider Ping Shu sold HK$2.3 billion worth of shares at a price of HK$20.43 per share. We usually don’t like insider selling, but the lower the selling price, the more we’re concerned about it. The silver lining is that this sale took place above the last price (HK$17.26). So this may not shed much light on insider confidence at current levels. Ping Shu was the only individual insider to sell shares in the past twelve months. Notably, Ping Shu was also the biggest buyer, having purchased HK$2.4 billion worth of shares.

In the past year, we can see that insiders bought 115.25 million shares worth HK$2.4 billion. But they sold 115 million shares for HK$2.3 billion. Overall, Haidilao International Holding insiders have been net buyers over the past year. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, how much and when, just click on the chart below!

SEHK:6862 Insider Trading Volume March 7, 2022

There are many other companies whose insiders buy shares. You probably do do not want to miss this free list of growing companies insiders are buying.

Insider ownership

Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the company for the long term. Insiders of Haidilao International Holding own approximately HK$48 billion in shares (or 50% of the company). I like to see this level of insider ownership because it increases the chances that management is thinking about the best interests of shareholders.

What could insider trading at Haidilao International Holding tell us?

The fact that there has been no insider trading from Haidilao International Holding recently certainly does not bother us. However, our analysis of transactions over the past year is encouraging. With strong insider ownership and encouraging transactions, it appears Haidilao International Holding insiders believe the company has some merit. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. At Simply Wall St, we found that Haidilao International Holding has 2 warning signs (1 is worrying!) which deserve your attention before going further in your analysis.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.


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