Insiders Made Right Decision To Sell As Legend Strategy International Holdings Group Dips 12%

Insiders at Legend Strategy International Holdings Group Company Limited (HKG:1355) sold HK$69m worth of stock at an average price of HK$0.12 a share over the past year, making the most of their investment. The company's market worth decreased by HK$21m over the past week after the stock price dropped 12%, although insiders were able to minimize their losses

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.

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The Last 12 Months Of Insider Transactions At Legend Strategy International Holdings Group

The insider, Fuer Yuan, made the biggest insider sale in the last 12 months. That single transaction was for HK$38m worth of shares at a price of HK$0.11 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.13. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 64% of Fuer Yuan's stake.

In the last twelve months insiders purchased 130.94m shares for HK$9.9m. On the other hand they divested 597.13m shares, for HK$69m. Over the last year we saw more insider selling of Legend Strategy International Holdings Group shares, than buying. They sold for an average price of about HK$0.12. It's not particularly great to see insiders were selling shares at below recent prices. But we wouldn't put too much weight on the insider selling. 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!

See our latest analysis for Legend Strategy International Holdings Group

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 Of Legend Strategy International Holdings Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Legend Strategy International Holdings Group insiders own 13% of the company, worth about HK$21m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Legend Strategy International Holdings Group Insider Transactions Indicate?

The fact that there have been no Legend Strategy International Holdings Group insider transactions recently certainly doesn't bother us. Our analysis of Legend Strategy International Holdings Group insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 5 warning signs for Legend Strategy International Holdings Group (2 are a bit unpleasant!) that we believe deserve your full attention.

Of course Legend Strategy International Holdings Group 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.