Selling Ling Yui Holdings Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Ling Yui Holdings Limited's (HKG:784) value has fallen 14% in the last week, but insiders who sold HK$12m worth of stock over the last year have had less success. The average selling price of HK$0.13 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Ling Yui Holdings

Ling Yui Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when GM & Executive Director Chi Fai Ling bought HK$8.7m worth of shares at a price of HK$0.15 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.11). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Chi Fai Ling was the only individual insider to buy during the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Ling Yui Holdings Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Ling Yui Holdings insiders own 74% of the company, worth about HK$64m. 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 Do The Ling Yui Holdings Insider Transactions Indicate?

We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Ling Yui Holdings insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ling Yui Holdings. At Simply Wall St, we've found that Ling Yui Holdings has 4 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

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.