Are Insiders Selling CA Cultural Technology Group Limited (HKG:1566) Stock?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in CA Cultural Technology Group Limited (HKG:1566).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

Check out our latest analysis for CA Cultural Technology Group

CA Cultural Technology Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Founder, Xiangsong Zhuang, sold HK$228m worth of shares at a price of HK$2.10 per share. So what is clear is that an insider saw fit to sell at around the current price of HK$2.00. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Notably Xiangsong Zhuang was also the biggest buyer, having purchased HK$37m worth of shares.

In total, CA Cultural Technology Group insiders sold more than they bought over the last year. The sellers received a price of around HK$2.10, on average. It's not particularly great to see insiders were selling shares around current prices. While some insiders have decided to take some money off the table, we wouldn't put too much weight on this fact. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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CA Cultural Technology Group Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at CA Cultural Technology Group. Specifically, Founder Xiangsong Zhuang bought HK$2.9m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. CA Cultural Technology Group insiders own about HK$832m worth of shares (which is 43% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About CA Cultural Technology Group Insiders?

It's certainly positive to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The recent buying by an insider , along with high insider ownership, suggest that CA Cultural Technology Group insiders are fairly aligned, and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for CA Cultural Technology Group you should be aware of, and 1 of these is significant.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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