Insider Sellers Might Regret Selling China In-Tech Shares at a Lower Price Than Current Market Value
China In-Tech Limited's (HKG:464) stock price has dropped 12% in the previous week, but insiders who sold HK$21m in stock over the past year have had less luck. The average selling price of HK$0.93 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
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.
China In-Tech Insider Transactions Over The Last Year
The insider, Hung Shun Ma, made the biggest insider sale in the last 12 months. That single transaction was for HK$6.8m worth of shares at a price of HK$1.08 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$0.58. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Hung Shun Ma.
Hung Shun Ma divested 22.12m shares over the last 12 months at an average price of HK$0.93. 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 China In-Tech
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Does China In-Tech Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 8.6% of China In-Tech shares, worth about HK$38m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At China In-Tech Tell Us?
The fact that there have been no China In-Tech insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by China In-Tech insiders. The modest level of insider ownership is, at least, some comfort. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, China In-Tech has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
But note: China In-Tech 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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