Executive Director Feng Xia Sold A Bunch Of Shares In Baoye Group

Anyone interested in Baoye Group Company Limited (HKG:2355) should probably be aware that the Executive Director, Feng Xia, recently divested HK$3.7m worth of shares in the company, at an average price of HK$4.81 each. In particular, we note that the sale equated to a 100% reduction in their position size, which doesn't exactly instill confidence.

Check out our latest analysis for Baoye Group

Baoye Group Insider Transactions Over The Last Year

Notably, that recent sale by Executive Director Feng Xia was not the only time they sold Baoye Group shares this year. They previously made an even bigger sale of -HK$5.1m worth of shares at a price of HK$3.86 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$4.90. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 35% of Feng Xia's stake.

Feng Xia ditched 7.30m shares over the year. The average price per share was CN¥4.01. You can see the insider transactions (by companies and 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!

I will like Baoye Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Baoye Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Baoye Group insiders own 56% of the company, currently worth about HK$1.4b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Baoye Group Insiders?

An insider sold Baoye Group shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Baoye Group makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. You'd be interested to know, that we found 1 warning sign for Baoye Group and we suggest you have a look.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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