Possible Bearish Signals With Techtronic Industries Insiders Disposing Stock

The fact that multiple Techtronic Industries Company Limited (HKG:669) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Techtronic Industries

The CEO & Executive Director, Steven Philip Richman, made the biggest insider sale in the last 12 months. That single transaction was for HK$32m worth of shares at a price of HK$99.36 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$85.50. So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 210.00k shares worth HK$19m. But they sold 803.23k shares for HK$77m. Over the last year we saw more insider selling of Techtronic Industries shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Techtronic Industries

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Insiders At Techtronic Industries Have Sold Stock Recently

We've seen more insider selling than insider buying at Techtronic Industries recently. In that time, insiders dumped HK$36m worth of shares. On the other hand we note Founder & Group Executive Chairman Horst Julius Pudwill bought HK$14m worth of shares. 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

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Techtronic Industries insiders own 22% of the company, worth about HK$35b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Techtronic Industries Insiders?

The insider sales have outweighed the insider buying, at Techtronic Industries, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Techtronic Industries makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Techtronic Industries. While conducting our analysis, we found that Techtronic Industries has 1 warning sign and it would be unwise to ignore this.

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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.