Don't Ignore The Insider Selling In China Cultural Tourism and Agriculture Group

We'd be surprised if China Cultural Tourism and Agriculture Group Limited (HKG:542) shareholders haven't noticed that the CEO & Executive Chairman of the Board, Lijun Yang, recently sold HK$1.0m worth of stock at HK$0.17 per share. On the bright side, that sale was only 0.2% of their holding, so we doubt it's very meaningful, on its own.

Check out our latest analysis for China Cultural Tourism and Agriculture Group

The Last 12 Months Of Insider Transactions At China Cultural Tourism and Agriculture Group

Over the last year, we can see that the biggest insider purchase was by insider Kaijun Chen for HK$148m worth of shares, at about HK$0.20 per share. That means that an insider was happy to buy shares at above the current price of HK$0.16. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid HK$155m for 785.61m shares. But they sold 228.10m shares for HK$34m. In total, China Cultural Tourism and Agriculture Group insiders bought more than they sold over the last year. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that China Cultural Tourism and Agriculture Group insiders own 66% of the company, worth about HK$811m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About China Cultural Tourism and Agriculture Group Insiders?

Unfortunately, there has been more insider selling of China Cultural Tourism and Agriculture Group stock, than buying, in the last three months. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So we're happy to look past recent trading. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Cultural Tourism and Agriculture Group. When we did our research, we found 4 warning signs for China Cultural Tourism and Agriculture Group (2 make us uncomfortable!) that we believe deserve your full attention.

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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com