Feiyang International Holdings Group Insiders Forfeit On 10% Gains After Selling Stock

Even though Feiyang International Holdings Group Limited (HKG:1901) stock gained 10% last week, insiders who sold CN¥3.3m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of CN¥0.21, which is higher than the current price, may have been the best decision.

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 Feiyang International Holdings Group

The Last 12 Months Of Insider Transactions At Feiyang International Holdings Group

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Yang Shen, sold HK$1.3m worth of shares at a price of HK$0.22 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.076. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Yang Shen.

Yang Shen ditched 16.05m shares over the year. The average price per share was CN¥0.21. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership Of Feiyang 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. Feiyang International Holdings Group insiders own about HK$25m worth of shares (which is 40% 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 Do The Feiyang International Holdings Group Insider Transactions Indicate?

The fact that there have been no Feiyang International Holdings Group insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Feiyang International Holdings Group insider transactions don't fill us with confidence. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Feiyang International Holdings Group has 2 warning signs and it would be unwise to ignore them.

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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.