Insider Sellers Might Regret Selling Sky Light Holdings Shares at a Lower Price Than Current Market Value

Even though Sky Light Holdings Limited (HKG:3882) has fallen by 29% over the past week , insiders who sold HK$238m worth of stock over the past year have had less luck. The average selling price of HK$1.29 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Sky Light Holdings

Sky Light Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Lan Zhihua for HK$120m worth of shares, at about HK$1.33 per share. That means that even when the share price was higher than HK$0.43 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Lan Zhihua was the only individual insider to buy shares in the last twelve months.

In total, Sky Light Holdings insiders sold more than they bought over 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 are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Sky Light Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Sky Light Holdings insiders own 56% of the company, currently worth about HK$293m based on the recent share price. 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 Sky Light Holdings Tell Us?

The fact that there have been no Sky Light Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Sky Light Holdings, we can't say the same about the selling of shares. 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, Sky Light Holdings has 4 warning signs (and 3 which are a bit unpleasant) we think you should know about.

But note: Sky Light 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 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.

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