China Renaissance Holdings Insiders Made A Wise Decision By Selling CN¥7.5m Worth Of Stock

Despite a 11% gain in China Renaissance Holdings Limited's (HKG:1911) stock price this week, shareholders shouldn't let up. Even though stock prices were relatively low, insiders elected to sell CN¥7.5m worth of stock in the last year, which could indicate some expected downturn.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At China Renaissance Holdings

In the last twelve months, the biggest single sale by an insider was when the insider, Fan Bao, sold HK$7.5m worth of shares at a price of HK$4.24 per share. That means that even when the share price was below the current price of HK$7.85, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 7.3% of Fan Bao's holding. Fan Bao was the only individual insider to sell over the last year.

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!

See our latest analysis for China Renaissance Holdings

I will like China Renaissance Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does China Renaissance Holdings Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. China Renaissance Holdings insiders own about HK$206m worth of shares. That equates to 4.6% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About China Renaissance Holdings Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of China Renaissance Holdings insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for China Renaissance Holdings (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

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.