Insiders Who Sold HK$30m Of FDB Holdings Made The Right Call
While FDB Holdings Limited (HKG:1826) shareholders have had a good week with the stock up 11%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell HK$30m worth of stock in the past 12 months. This could be a sign of impending weakness.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At FDB Holdings
In the last twelve months, the biggest single sale by an insider was when the CEO, Compliance Officer & Chairman of the Board, Kin Siu Ng, sold HK$30m worth of shares at a price of HK$0.076 per share. That means that an insider was selling shares at slightly below the current price (HK$0.20). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 48% of Kin Siu Ng's holding. The only individual insider seller over the last year was Kin Siu Ng.
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!
View our latest analysis for FDB 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).
Does FDB Holdings Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that FDB Holdings insiders own 40% of the company, worth about HK$126m. 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 FDB Holdings Tell Us?
The fact that there have been no FDB Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of FDB Holdings, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for FDB Holdings (2 don't sit too well with us) you should be aware of.
But note: FDB Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.