Insiders Of Yestar Healthcare Holdings Make A Tidy Sum Selling At CN¥0.022

While Yestar Healthcare Holdings Company Limited (HKG:2393) shareholders have had a good week with the stock up 84%, they shouldn't let their guards down. In spite of the relatively cheap prices, insiders made the decision to sell CN¥1.4m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Yestar Healthcare Holdings

Yestar Healthcare Holdings Insider Transactions Over The Last Year

The Non-Executive Chairman, James Hartono, made the biggest insider sale in the last 12 months. That single transaction was for HK$1.3m worth of shares at a price of HK$0.021 each. That means that even when the share price was below the current price of HK$0.07, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. This single sale was just 10% of James Hartono's stake. The only individual insider seller over the last year was James Hartono.

James Hartono sold a total of 64.14m shares over the year at an average price of CN¥0.022. 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!

I will like Yestar Healthcare 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.

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. Yestar Healthcare Holdings insiders own about HK$96m worth of shares (which is 59% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Yestar Healthcare Holdings Insider Transactions Indicate?

The fact that there have been no Yestar Healthcare Holdings insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Yestar Healthcare Holdings insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Yestar Healthcare Holdings. Every company has risks, and we've spotted 4 warning signs for Yestar Healthcare Holdings (of which 3 are significant!) you should know about.

But note: Yestar Healthcare Holdings 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.