Insiders Made Right Decision To Sell As Gilston Group Dips 11%

By selling HK$13m worth of Gilston Group Limited (HKG:2011) stock at an average sell price of HK$1.21 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by HK$109m over the past week after the stock price dropped 11%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Gilston Group

The Last 12 Months Of Insider Transactions At Gilston Group

In the last twelve months, the biggest single sale by an insider was when the insider, Chuanzhi Qiu, sold HK$13m worth of shares at a price of HK$1.21 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$1.55. 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 8.3% of Chuanzhi Qiu's holding. Chuanzhi Qiu was the only individual insider to sell over the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Gilston Group 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 appears that Gilston Group insiders own 21% of the company, worth about HK$196m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Gilston Group Insider Transactions Indicate?

The fact that there have been no Gilston Group insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Gilston Group insiders selling. 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. For example - Gilston Group has 1 warning sign we think you should be aware of.

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.