Shareholders May Not Overlook Kidztech Holdings Insiders Selling CN¥93m In Stock

Kidztech Holdings Limited's (HKG:6918) stock rose 32% last week, but insiders who sold CN¥93m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of CN¥1.87, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Kidztech Holdings

The Last 12 Months Of Insider Transactions At Kidztech Holdings

The insider, Xiongbin Wu, made the biggest insider sale in the last 12 months. That single transaction was for HK$93m worth of shares at a price of HK$1.87 each. While insider selling is a negative, to us, it is more negative if the shares are sold 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$0.18. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Xiongbin Wu.

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

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Kidztech Holdings insiders own 42% of the company, currently worth about HK$47m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Kidztech Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Kidztech Holdings shares in the last quarter. While we feel good about high insider ownership of Kidztech Holdings, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for Kidztech Holdings you should be aware of, and 2 of them can't be ignored.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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