Have Royale Home Holdings Limited (HKG:1198) Insiders Been Selling Their Stock?

We wouldn't blame Royale Home Holdings Limited (HKG:1198) shareholders if they were a little worried about the fact that Kam Pang Tse, the Co-Founder & Executive Chairman recently netted about HK$60m selling shares at an average price of HK$1.20. However, that sale only accounted for 6.3% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Royale Home Holdings

The Last 12 Months Of Insider Transactions At Royale Home Holdings

Notably, that recent sale by Kam Pang Tse is the biggest insider sale of Royale Home 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$1.40, 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 6.3% of Kam Pang Tse's holding.

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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Insider Ownership of Royale Home Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Royale Home Holdings insiders own 31% of the company, currently worth about HK$1.1b based on the recent share price. 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 Royale Home Holdings Insider Transactions Indicate?

An insider hasn't bought Royale Home 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. 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 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. For example - Royale Home Holdings has 1 warning sign we think you should be aware of.

But note: Royale Home Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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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.
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