Have Earthasia International Holdings Limited (HKG:6128) Insiders Been Selling Their Stock?

We wouldn't blame Earthasia International Holdings Limited (HKG:6128) shareholders if they were a little worried about the fact that Xin Gao, a company insider, recently netted about HK$9.7m selling shares at an average price of HK$0.60. That sale reduced their total holding by 34% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Earthasia International Holdings

The Last 12 Months Of Insider Transactions At Earthasia International Holdings

Notably, that recent sale by Xin Gao is the biggest insider sale of Earthasia International Holdings shares that we've seen in the last year. That means that even when the share price was below the current price of HK$0.83, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 34% of Xin Gao's stake.

Happily, we note that in the last year insiders paid HK$2.6m for 2.01m shares. But they sold 17.81m shares for HK$15m. Over the last year we saw more insider selling of Earthasia International Holdings shares, than buying. The average sell price was around HK$0.82. It's not particularly great to see insiders were selling shares around current prices. While some insiders have decided to take some money off the table, we wouldn't put too much weight on this fact. 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!

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 Earthasia International 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Earthasia International Holdings insiders own about HK$169m worth of shares (which is 43% 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.

What Might The Insider Transactions At Earthasia International Holdings Tell Us?

The stark truth for Earthasia International Holdings is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Earthasia International Holdings has 4 warning signs (and 1 which is concerning) we think you should know about.

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, but not derivative transactions.

If you decide to trade Earthasia International Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.