Insiders Could Have Profited By Holding onto ITC Neocloud Group Shares Despite 17% Drop
Despite the fact that ITC Neocloud Group Limited's (HKG:199) value has dropped 17% in the last week insiders who sold HK$267m worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of HK$0.96 is still below the current share price.
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 ITC Neocloud Group
In fact, the recent purchase by Joint Executive Vice Chairman of the Board Kwok Keung Chan was not their only trade of ITC Neocloud Group shares this year. They previously made a sale of -HK$60m worth of shares at a price of HK$2.00 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.58). So it may not shed much light on insider confidence at current levels.
In total, ITC Neocloud Group insiders sold more than they bought over the last year. The average sell price was around HK$0.96. Insider selling doesn't make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is HK$0.58). You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for ITC Neocloud Group
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).
ITC Neocloud Group Insiders Are Selling The Stock
We've seen more insider selling than insider buying at ITC Neocloud Group recently. We note insiders cashed in HK$27m worth of shares. Meanwhile Joint Executive Vice Chairman of the Board Kwok Keung Chan bought HK$455k worth , as we said above . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Insider Ownership
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. ITC Neocloud Group insiders own about HK$231m worth of shares. That equates to 36% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The ITC Neocloud Group Insider Transactions Indicate?
The stark truth for ITC Neocloud Group is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 5 warning signs we've spotted with ITC Neocloud Group (including 2 which are significant).
Of course ITC Neocloud Group 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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