Trade Alert: The Founder Of Li Ning Company Limited (HKG:2331), Ning Li, Has Sold Some Shares Recently

Some Li Ning Company Limited (HKG:2331) shareholders may be a little concerned to see that the Founder, Ning Li, recently sold a substantial HK$41m worth of stock at a price of HK$47.71 per share. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

Check out our latest analysis for Li Ning

The Last 12 Months Of Insider Transactions At Li Ning

In fact, the recent sale by Founder Ning Li was not their only sale of Li Ning shares this year. Earlier in the year, they fetched HK$35.49 per share in a -HK$162m sale. That means that an insider was selling shares at slightly below the current price (HK$46.30). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 31% of Ning Li's holding.

Insiders in Li Ning didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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 Li Ning Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Li Ning insiders own about HK$95m worth of shares. That equates to 0.08% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Li Ning Insiders?

An insider hasn't bought Li Ning stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Li Ning is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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 Li Ning and understanding these should be part of your investment process.

But note: Li Ning 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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