Have Fountain Set (Holdings) Limited (HKG:420) Insiders Been Selling Their Stock?

We wouldn't blame Fountain Set (Holdings) Limited (HKG:420) shareholders if they were a little worried about the fact that Chung Fong Ha, the Founder & Honorary Chairman recently netted about HK$24m selling shares at an average price of HK$1.10. That's a big disposal, and it decreased their holding size by 20%, which is notable but not too bad.

See our latest analysis for Fountain Set (Holdings)

The Last 12 Months Of Insider Transactions At Fountain Set (Holdings)

Notably, that recent sale by Chung Fong Ha is the biggest insider sale of Fountain Set (Holdings) shares that we've seen in the last year. That means that an insider was selling shares at around the current price of HK$0.96. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

Does Fountain Set (Holdings) Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 15% of Fountain Set (Holdings) shares, worth about HK$179m. 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 Do The Fountain Set (Holdings) Insider Transactions Indicate?

The stark truth for Fountain Set (Holdings) is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. 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. 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. For example - Fountain Set (Holdings) has 3 warning signs 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, 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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