Shareholders Can't Ignore MO$63m Of Sales By Wai Hung Group Holdings Insiders

Last week, Wai Hung Group Holdings Limited's (HKG:3321) stock jumped 12%, but insiders who sold MO$63m worth of stock in over the past year are likely to be in a better position. Selling at an average price of MO$0.72, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Wai Hung Group Holdings

Wai Hung Group Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Guanqi Chen, sold HK$33m worth of shares at a price of HK$0.69 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.056). So it may not tell us anything about how insiders feel about the current share price. Guanqi Chen was the only individual insider to sell shares in the last twelve months. Notably Guanqi Chen was also the biggest buyer, having purchased HK$6.3m worth of shares.

Over the last year, we can see that insiders have bought 105.47m shares worth HK$6.3m. On the other hand they divested 86.48m shares, for HK$63m. Guanqi Chen ditched 86.48m shares over the year. The average price per share was MO$0.72. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Wai Hung Group Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Wai Hung Group Holdings insiders own 61% of the company, worth about HK$21m. 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 Do The Wai Hung Group Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Wai Hung Group Holdings shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Wai Hung Group Holdings insiders selling. 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. At Simply Wall St, we've found that Wai Hung Group Holdings has 5 warning signs (4 are a bit concerning!) 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.