Despite Hitting HK$0.20, Creative China Holdings Insiders Still Sold Too Soon
Despite the fact that Creative China Holdings Limited's (HKG:8368) value has dropped 11% in the last week insiders who sold CN¥2.0m worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥0.25 is still lower than the current share price.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Creative China Holdings
The insider, Longfei Liang, made the biggest insider sale in the last 12 months. That single transaction was for HK$2.0m worth of shares at a price of HK$0.25 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$0.20). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Longfei Liang.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Creative China Holdings
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Creative China Holdings Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Creative China Holdings shares. Specifically, insider Longfei Liang ditched HK$2.0m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Creative China 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Creative China Holdings insiders own about HK$42m worth of shares. That equates to 37% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Creative China Holdings Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Creative China Holdings is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Creative China Holdings. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Creative China Holdings.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.