Have Shenglong Splendecor International Limited (HKG:8481) Insiders Been Selling Their Stock?

We wouldn't blame Shenglong Splendecor International Limited (HKG:8481) shareholders if they were a little worried about the fact that Yunan Ren, a company insider, recently netted about HK$5.4m selling shares at an average price of HK$0.24. That diminished their holding by a very significant 67%, which arguably implies a strong desire to reallocate capital.

Check out our latest analysis for Shenglong Splendecor International

The Last 12 Months Of Insider Transactions At Shenglong Splendecor International

Notably, that recent sale by insider Yunan Ren was not the only time they sold Shenglong Splendecor International shares this year. They previously made an even bigger sale of -HK$5.6m worth of shares at a price of HK$0.23 per share. That means that even when the share price was below the current price of HK$0.23, 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. 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. It is worth noting that this sale was only 42% of Yunan Ren's holding.

Over the last year, we can see that insiders have bought 17.00m shares worth HK$4.0m. But insiders sold 47.55m shares worth HK$11m. Yunan Ren ditched 47.55m shares over the year. The average price per share was CN¥0.23. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Shenglong Splendecor International insiders own about HK$74m worth of shares (which is 63% 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.

What Might The Insider Transactions At Shenglong Splendecor International Tell Us?

The insider sales have outweighed the insider buying, at Shenglong Splendecor International, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. 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. 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. In terms of investment risks, we've identified 3 warning signs with Shenglong Splendecor International and understanding these should be part of your investment process.

Of course Shenglong Splendecor International may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

When trading Shenglong Splendecor International or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide 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.