Have China Cultural Tourism and Agriculture Group Insiders Been Selling Stock?

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$1.4m worth of stock at HK$0.14 per share. On the bright side, that sale was only 0.3% of their holding, so we doubt it's very meaningful, on its own.

See our latest analysis for China Cultural Tourism and Agriculture Group

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

In fact, the recent sale by CEO & Executive Chairman of the Board Lijun Yang was not their only sale of China Cultural Tourism and Agriculture Group shares this year. They previously made an even bigger sale of -HK$11m worth of shares at a price of HK$0.12 per share. That means that an insider was selling shares at around the current price of HK$0.11. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Over the last year, we can see that insiders have bought 44.80m shares worth HK$6.5m. But insiders sold 253.16m shares worth HK$37m. Over the last year we saw more insider selling of China Cultural Tourism and Agriculture Group shares, than buying. The sellers received a price of around HK$0.15, on average. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of HK$0.11. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. China Cultural Tourism and Agriculture Group insiders own 65% of the company, currently worth about HK$561m based on the recent share price. 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 Do The China Cultural Tourism and Agriculture Group Insider Transactions Indicate?

Insiders haven't bought China Cultural Tourism and Agriculture Group stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for China Cultural Tourism and Agriculture Group you should be aware of, and 2 of these make us uncomfortable.

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.