Insiders Could Have Profited By Holding onto World Chess Shares Despite 31% Drop

World Chess PLC's (LON:CHSS) stock price has dropped 31% in the previous week, but insiders who sold €1.2m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of €0.031 is still lower than 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.

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The Last 12 Months Of Insider Transactions At World Chess

In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Ilya Merenzon, sold UK£971k worth of shares at a price of UK£0.035 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (UK£0.009). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Ilya Merenzon. Notably Ilya Merenzon was also the biggest buyer, having purchased UK£850k worth of shares.

Ilya Merenzon ditched 38.01m shares over the year. The average price per share was €0.031. 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!

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World Chess Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at World Chess. CEO & Director Ilya Merenzon sold just UK£26k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.

Does World Chess Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. World Chess insiders own 72% of the company, currently worth about UK£5.7m based on the recent share price. 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 Do The World Chess Insider Transactions Indicate?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of World Chess insider transactions don't fill us with confidence. 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 5 warning signs for World Chess (2 are a bit unpleasant) you should be aware of.

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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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.