China Oral Industry Group Holdings Insiders Benefit From Selling Stock At CN¥0.03

Despite a 14% gain in China Oral Industry Group Holdings Limited's (HKG:8406) stock price this week, shareholders shouldn't let up. In spite of the relatively cheap prices, insiders made the decision to sell CN¥2.2m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

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.

Check out our latest analysis for China Oral Industry Group Holdings

The Last 12 Months Of Insider Transactions At China Oral Industry Group Holdings

The insider, Rongren Chan, made the biggest insider sale in the last 12 months. That single transaction was for HK$2.2m worth of shares at a price of HK$0.03 each. That means that an insider was selling shares at slightly below the current price (HK$0.096). 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 42% of Rongren Chan's holding. Rongren Chan was the only individual insider to sell shares in the last twelve months.

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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

China Oral Industry Group Holdings Insiders Are Selling The Stock

The last quarter saw substantial insider selling of China Oral Industry Group Holdings shares. In total, insider Rongren Chan dumped HK$2.2m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. China Oral Industry Group Holdings insiders own about HK$51m worth of shares (which is 46% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At China Oral Industry Group Holdings Tell Us?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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, China Oral Industry Group Holdings has 5 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course China Oral Industry Group Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.