This Insider Has Just Sold Shares In Royal Group Holdings International

We wouldn't blame Royal Group Holdings International Company Limited (HKG:8300) shareholders if they were a little worried about the fact that Man Wai Wong, the Executive Chairman recently netted about HK$10m selling shares at an average price of HK$0.032. That's a big disposal, and it decreased their holding size by 17%, which is notable but not too bad.

Check out our latest analysis for Royal Group Holdings International

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

Notably, that recent sale by Man Wai Wong is the biggest insider sale of Royal Group Holdings International shares that we've seen in the last year. That means that even when the share price was below the current price of HK$0.18, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 17% of Man Wai Wong's holding.

Man Wai Wong sold a total of 479.44m shares over the year at an average price of HK$0.032. 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!

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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Royal Group Holdings International insiders own about HK$377m worth of shares (which is 81% 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.

What Might The Insider Transactions At Royal Group Holdings International Tell Us?

The stark truth for Royal Group Holdings International is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Royal Group Holdings International has 4 warning signs (and 1 which is a bit concerning) we think you should know about.

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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.