Shareholders Can't Ignore HK$20m Of Sales By Clarity Medical Group Holding Insiders

Even though Clarity Medical Group Holding Limited (HKG:1406) stock gained 21% last week, insiders who sold HK$20m worth of stock over the past year are probably better off. Selling at an average price of HK$0.53, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Clarity Medical Group Holding

The Last 12 Months Of Insider Transactions At Clarity Medical Group Holding

Over the last year, we can see that the biggest insider sale was by the Executive Director, Wai Ip Tse, for HK$5.6m worth of shares, at about HK$0.55 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.46. So it may not shed much light on insider confidence at current levels. Wai Ip Tse was the only individual insider to sell shares in the last twelve months.

Wai Ip Tse divested 37.69m shares over the last 12 months at an average price of HK$0.53. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Clarity Medical Group Holding insiders own about HK$46m worth of shares. That equates to 19% of the company. 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 Clarity Medical Group Holding Insider Transactions Indicate?

The fact that there have been no Clarity Medical Group Holding insider transactions recently certainly doesn't bother us. Still, the insider transactions at Clarity Medical Group Holding in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Clarity Medical Group Holding. At Simply Wall St, we've found that Clarity Medical Group Holding has 2 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

But note: Clarity Medical Group Holding may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.