Director’s buying and selling activity up sharply on week
Director share acquisitions in Asia Cement (China) suggests the stock price has bottomed
The director activity rose based on filings on the stock exchange in the second week of May with 39 companies that recorded 191 purchases worth HK$360 million versus 12 firms with 51 disposals worth HK$54 million. The buy figures were sharply up from the previous week’s four-day total of 29 companies, 158 purchases and HK$238 million. On the selling side, the number of firms and trades were up from the previous week’s nine companies and 25 disposals. The sell value, however, was sharply down from the previous week’s disposals worth HK$107 million.
Meanwhile, the buyback activity rose for the second straight week with 25 companies that posted 114 repurchases worth HK$539 million. The figures were sharply up from the previous week’s 18 firms, 88 trades and HK$154 million.
There were several significant trades by companies and directors last week following sharp movement in share prices. There were purchases in Wasion Group, Asia Cement Holdings and China Singyes Solar following the sharp fall in their share prices and rare insider sales in China Maple Leaf Educational Systems following the steep gain in its share price.
There was a buyback and a purchase by Chairman Ji Wei in metering systems manufacturer Wasion Group with a combined 3 million shares purchased on May 10 at an average of HK$3.93 each. The acquisitions were made on the back of the 20 per cent drop in the share price since April from HK$4.90. The Company bought back 2 million shares on May 10 at HK$3.92 each. The Group previously acquired 4 million shares from April 1 to 5 at HK$4.02 each and 6 million shares from February 1 to 12 at an average of HK$3.40 each. Prior to the buybacks this year, the company acquired 2.8 million shares from January to June 2010 at an average of HK$4.90 each and 5.83 million shares from June to December 2008 at HK$3.01 to HK$0.73 each or an average of HK$1.49 each. Chairman Ji Wei, on the other hand, resumed buying at a lower price with 1 million shares purchased on May 10 at HK$3.95 each. The trade increased his holdings to 517.887 million shares or 50.93 per cent of the issued capital. He previously acquired one million shares on January 15 at HK$6.97 each and 2.97 million shares from March to December 2015 at an average of HK$8.04 each. Investors should note that the stock rose by an average of 43 per cent six months after the Chairman bought shares based on 287 purchases since 2007. The stock recorded a price gain six months after on 69 per cent of those acquisitions. The stock closed at HK$3.96 on Friday.
One of the telling signs a stock has bottomed is when a director turns positive following a very long selling streak. Even more telling is when that purchase is made at sharply lower than the director’s sale prices. One stock that fits this bill is cement manufacturer Asia Cement (China) Holdings with Executive Director Chang Tsai-hsiung picking up shares this month at sharply lower than his sale prices from 2011 to 2015. Mr. Chang purchased 100,000 shares on May 5 at HK$1.70 each, which increased his holdings by 8 per cent to 1.422 million shares or 0.09 per cent of the issued capital. The trade was made on the back of the 33 per cent drop in the share price since October 2015 from HK$2.52. The counter is also sharply down since June 2015 from HK$4.14. He previously sold 111,000 shares from January to May 2015 at an average of HK$4.57 each and a net 267,000 shares from June 2011 to December 2014 at an average of HK$5.54 each. The stock closed at HK$1.57 on Friday.
Chairman Liu Hong Wei recorded his first trades in glass and stone curtain walls and solar energy products manufacturer China Singyes Solar Technologies since August 2015 with 2.5 million shares purchased from May 4 to 5 at HK$2.72 each. The trades increased his holdings to 250.264 million shares or 36 per cent of the issued capital. The acquisitions were made on the back of the 38 per cent drop in the share price since March from HK$4.36. The counter is also sharply down since October from HK$6.98. He previously acquired 1.3 million shares from April to August 2015 at HK$11.30 to HK$5.34 each or an average of HK$7.70 each and 327,000 shares in December 2014 at HK$11.15 each. Investors should note that the stock rose by an average of 24 per cent three months after the chairman bought shares based on 82 purchases since 2010. The stock recorded a price gain three months after on 74 per cent of those acquisitions. The stock closed at HK$2.72 on Friday.
Chief Financial Officer Zhang Jing Xia recorded her first trades in international school operator China Maple Leaf Educational Systems since the stock was listed in November 2014 with one million shares sold from April 29 to May 3 at HK$6.18 each. The trades, which accounted for 7 per cent of the stock’s trading volume, reduced her holdings by 38 per cent to 1.606 million shares or 0.12 per cent of the issued capital. The sales were made on the back of the 94 per cent rise in the share price since January from HK$3.18. The CFO’s sale price was sharply higher than the IPO prices of HK$2.23 to HK$3.07. Zhang joined the Group in 1995. The stock closed at HK$5.89 on Friday.