CM Hi-Tech Cleanroom Insiders Selling CN¥5.1m In Stock Relieved As Market Cap Slides To HK$284m

Insiders seem to have made the most of their holdings by selling CN¥5.1m worth of CM Hi-Tech Cleanroom Limited (HKG:2115) stock at an average sell price of CN¥0.12 during the past year. The company's market worth decreased by HK$38m over the past week after the stock price dropped 12%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for CM Hi-Tech Cleanroom

CM Hi-Tech Cleanroom Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Douglas Bockmiller, sold HK$5.1m worth of shares at a price of HK$0.12 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.20. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 66% of Douglas Bockmiller's stake.

In the last twelve months insiders purchased 3.92m shares for HK$977k. But they sold 41.35m shares for HK$5.1m. All up, insiders sold more shares in CM Hi-Tech Cleanroom than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like CM Hi-Tech Cleanroom better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At CM Hi-Tech Cleanroom Have Sold Stock Recently

We've seen more insider selling than insider buying at CM Hi-Tech Cleanroom recently. In that time, insiders dumped HK$5.1m worth of shares. Meanwhile Executive Chairman Yew Sum Ng bought HK$366k worth. 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 Of CM Hi-Tech Cleanroom

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. CM Hi-Tech Cleanroom insiders own 51% of the company, currently worth about HK$144m 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 Does This Data Suggest About CM Hi-Tech Cleanroom Insiders?

The insider sales have outweighed the insider buying, at CM Hi-Tech Cleanroom, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since CM Hi-Tech Cleanroom is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. In terms of investment risks, we've identified 3 warning signs with CM Hi-Tech Cleanroom and understanding these should be part of your investment process.

But note: CM Hi-Tech Cleanroom may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.