Have Shenghui Cleanness Group Holdings Insiders Been Selling Stock?

We wouldn't blame Shenghui Cleanness Group Holdings Limited (HKG:2521) shareholders if they were a little worried about the fact that Liming Chen, the Executive Director recently netted about HK$11m selling shares at an average price of HK$0.34. However, that sale only accounted for 5.7% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Shenghui Cleanness Group Holdings

In fact, the recent sale by Liming Chen was the biggest sale of Shenghui Cleanness Group Holdings shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of HK$0.42, an insider wanted to cash in some shares. 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. We note that the biggest single sale was only 5.7% of Liming Chen's holding.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Shenghui Cleanness Group Holdings

I will like Shenghui Cleanness Group Holdings 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

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Shenghui Cleanness Group Holdings insiders own 58% of the company, worth about HK$484m. 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 Do The Shenghui Cleanness Group Holdings Insider Transactions Indicate?

An insider hasn't bought Shenghui Cleanness Group 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 Shenghui Cleanness Group 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 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. To help with this, we've discovered 3 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Shenghui Cleanness Group Holdings.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.