Who Has Been Selling Pipeline Engineering Holdings Limited (HKG:1865) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Pipeline Engineering Holdings Limited (HKG:1865).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Pipeline Engineering Holdings

The Last 12 Months Of Insider Transactions At Pipeline Engineering Holdings

Over the last year, we can see that the biggest insider sale was by the Joint Chairman & CEO, Guan Wah Shi, for HK$56m worth of shares, at about HK$1.00 per share. So we know that an insider sold shares at around the present share price of HK$0.93. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Guan Wah Shi was the only individual insider to sell over the last year.

Guan Wah Shi sold a total of 172.13m shares over the year at an average price of S$1.04. 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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Insiders at Pipeline Engineering Holdings Have Sold Stock Recently

The last quarter saw substantial insider selling of Pipeline Engineering Holdings shares. In total, Joint Chairman & CEO Guan Wah Shi sold HK$75m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Pipeline Engineering Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Pipeline Engineering Holdings insiders own 48% of the company, worth about HK$518m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Pipeline Engineering Holdings Tell Us?

An insider hasn't bought Pipeline Engineering Holdings stock in the last three months, but there was some selling. And even if we look at 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. While we like knowing 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. Be aware that Pipeline Engineering Holdings is showing 4 warning signs in our investment analysis, and 1 of those is potentially serious...

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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