Who Has Been Selling Tu Yi Holding Company Limited (HKG:1701) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Tu Yi Holding Company Limited (HKG:1701).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Tu Yi Holding

The Last 12 Months Of Insider Transactions At Tu Yi Holding

Over the last year, we can see that the biggest insider sale was by the Executive Director, Wei Pan, for HK$18m worth of shares, at about HK$0.60 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.24). So it may not tell us anything about how insiders feel about the current share price. Wei Pan was the only individual insider to sell over the last year. Notably Wei Pan was also the biggest buyer, having purchased HK$691k worth of shares.

Wei Pan sold a total of 48.82m shares over the year at an average price of CN¥0.64. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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: insiders have been buying them).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Tu Yi Holding insiders own about HK$160m worth of shares (which is 70% 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.

So What Does This Data Suggest About Tu Yi Holding Insiders?

It doesn't really mean much that no insider has traded Tu Yi Holding shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Tu Yi Holding insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 6 warning signs for Tu Yi Holding (of which 1 can't be ignored!) you should know about.

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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