Insiders Could Have Profited By Holding onto Sheung Moon Holdings Shares Despite 10% Drop

Even though Sheung Moon Holdings Limited (HKG:8523) has fallen by 10% over the past week , insiders who sold HK$32m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of HK$0.36 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Sheung Moon Holdings

Sheung Moon Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Honorary Chairman, Sze Wo Tang, sold HK$17m worth of shares at a price of HK$0.34 per share. 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$0.22. So it is hard to draw any strong conclusion from it. Sze Wo Tang was the only individual insider to sell over the last year.

Sze Wo Tang divested 89.70m shares over the last 12 months at an average price of HK$0.36. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Sheung Moon Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Sheung Moon Holdings insiders own about HK$54m worth of shares (which is 61% of the company). 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 Sheung Moon Holdings Insiders?

The fact that there have been no Sheung Moon Holdings insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Sheung Moon Holdings insider transactions don't fill us with confidence. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Sheung Moon Holdings has 3 warning signs (and 2 which are significant) we think you should know about.

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.