We note that the Sino Oil and Gas Holdings Limited (HKG:702) Deputy Chairman & CEO, Hap King, recently sold HK$202k worth of stock for HK$0.10 per share. It wasn’t a huge sale, but it did reduce their holding by 19%. This does not instill confidence.
The Last 12 Months Of Insider Transactions At Sino Oil and Gas Holdings
Notably, that recent sale by Hap King is the biggest insider sale of Sino Oil and Gas Holdings shares that we’ve seen in the last year. That means that even when the share price was slightly below the current price of HK$0.10, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 19%of Hap King’s holding.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership of Sino Oil and Gas Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Sino Oil and Gas Holdings insiders own 42% of the company, currently worth about HK$145m based on the recent share price. 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 Sino Oil and Gas Holdings Tell Us?
An insider hasn’t bought Sino Oil and Gas Holdings stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. 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. Along with insider transactions, I recommend checking if Sino Oil and Gas Holdings is growing revenue. This free chart of historic revenue and earnings should make that easy.
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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