This Insider Has Just Sold Shares In Chi Kan Holdings

We wouldn't blame Chi Kan Holdings Limited (HKG:9913) shareholders if they were a little worried about the fact that Hon Kwong Lo, the Executive Chairman of the Board recently netted about HK$72m selling shares at an average price of HK$0.72. That's a big disposal, and it decreased their holding size by 18%, which is notable but not too bad.

View our latest analysis for Chi Kan Holdings

The Last 12 Months Of Insider Transactions At Chi Kan Holdings

Notably, that recent sale by Hon Kwong Lo is the biggest insider sale of Chi Kan Holdings shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (HK$3.07). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 18% of Hon Kwong Lo's stake.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Chi Kan Holdings insiders own about HK$2.1b worth of shares (which is 69% of the company). 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 Chi Kan Holdings Insider Transactions Indicate?

An insider hasn't bought Chi Kan Holdings stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Chi Kan Holdings 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. Case in point: We've spotted 3 warning signs for Chi Kan Holdings you should be aware of, and 1 of these is a bit unpleasant.

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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.