Heng Tai Consumables Group Up 12%, But Some Insiders Miss Out

Last week, Heng Tai Consumables Group Limited's (HKG:197) stock jumped 12%, but insiders who sold HK$2.6m worth of stock in over the past year are likely to be in a better position. Selling at an average price of HK$0.30, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Heng Tai Consumables Group

Over the last year, we can see that the biggest insider sale was by the insider, Ka Siu Tang, for HK$1.8m worth of shares, at about HK$0.30 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$0.20. So it may not shed much light on insider confidence at current levels. Ka Siu Tang was the only individual insider to sell over the last year.

Ka Siu Tang divested 8.80m shares over the last 12 months at an average price of HK$0.30. 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!

See our latest analysis for Heng Tai Consumables Group

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Heng Tai Consumables Group insiders own 41% of the company, worth about HK$15m. 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 Heng Tai Consumables Group Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Heng Tai Consumables Group, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Heng Tai Consumables Group. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Heng Tai Consumables Group.

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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.