Shareholders May Not Overlook Arta TechFin Insiders Selling HK$216m In Stock
Even though Arta TechFin Corporation Limited (HKG:279) stock gained 11% last week, insiders who sold HK$216m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of HK$0.49, which is higher than the current price, may have been the best decision.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Arta TechFin
Over the last year, we can see that the biggest insider sale was by the Non-Executive Chairman, Chi-Kong Cheng, for HK$216m worth of shares, at about HK$0.49 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.41. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Chi-Kong Cheng. Notably Chi-Kong Cheng was also the biggest buyer, having purchased HK$179m worth of shares.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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 Arta TechFin
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).
Insider Ownership Of Arta TechFin
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Arta TechFin insiders own about HK$318m worth of shares (which is 56% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Arta TechFin Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Arta TechFin insiders selling. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 2 warning signs for Arta TechFin (1 can't be ignored) you should be aware of.
Of course Arta TechFin 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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