Stock Analysis

Fountain Set (Holdings)'s Stock Sinks To HK$0.54, But Insiders Sold Even Lower

SEHK:420
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Fountain Set (Holdings) Limited's (HKG:420) stock price has dropped 11% in the previous week, but insiders who sold HK$930k in stock over the past year have had less luck. The average selling price of HK$0.78 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Fountain Set (Holdings)

Fountain Set (Holdings) Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Founder & Honorary Chairman, Chung Fong Ha, for HK$930k worth of shares, at about HK$0.78 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.54. So it may not tell us anything about how insiders feel about the current share price. Chung Fong Ha was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
SEHK:420 Insider Trading Volume August 29th 2023

I will like Fountain Set (Holdings) better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Fountain Set (Holdings)

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Fountain Set (Holdings) insiders own about HK$64m worth of shares (which is 9.7% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Do The Fountain Set (Holdings) Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Fountain Set (Holdings) shares in the last quarter. Our analysis of Fountain Set (Holdings) insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fountain Set (Holdings). To that end, you should learn about the 2 warning signs we've spotted with Fountain Set (Holdings) (including 1 which doesn't sit too well with us).

But note: Fountain Set (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. 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.