Insiders of NewOcean Energy Holdings Limited (HKG:342) must have made a tidy sum after selling stock currently worth HK$0.051 at HK$0.066

By
Simply Wall St
Published
March 22, 2022
SEHK:342
Source: Shutterstock

Despite the fact that NewOcean Energy Holdings Limited (HKG:342) stock rose 13% last week, insiders who sold HK$2.7m worth of stock in the previous 12 months are likely to be 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 HK$0.066, 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for NewOcean Energy Holdings

NewOcean Energy Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Tseng Hon Wong, for HK$2.7m worth of shares, at about HK$0.066 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$0.051. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Tseng Hon Wong.

Happily, we note that in the last year insiders paid HK$1.8m for 4.96m shares. But they sold 41.12m shares for HK$2.7m. 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!

insider-trading-volume
SEHK:342 Insider Trading Volume March 22nd 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of NewOcean Energy Holdings

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 appears that NewOcean Energy Holdings insiders own 23% of the company, worth about HK$17m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The NewOcean Energy Holdings Insider Transactions Indicate?

The fact that there have been no NewOcean Energy Holdings insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by NewOcean Energy Holdings insiders. The modest level of insider ownership is, at least, some comfort. 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. To that end, you should learn about the 4 warning signs we've spotted with NewOcean Energy Holdings (including 3 which don't sit too well with us).

Of course NewOcean Energy Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.