Yestar Healthcare Holdings Insider Stock Sales Prove Timely As Market Valuation Descends To HK$61m

Insiders seem to have made the most of their holdings by selling CN¥1.5m worth of Yestar Healthcare Holdings Company Limited (HKG:2393) stock at an average sell price of CN¥0.023 during the past year. The company’s market cap plunged by HK$9.3m after price dropped by 13% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, 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$0.026, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 10% of James Hartono's holding. James Hartono was the only individual insider to sell shares in the last twelve months.

James Hartono sold a total of 64.29m shares over the year at an average price of CN¥0.023. 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!

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).

Insiders At Yestar Healthcare Holdings Have Sold Stock Recently

The last quarter saw substantial insider selling of Yestar Healthcare Holdings shares. Specifically, Non-Executive Chairman James Hartono ditched HK$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Yestar Healthcare Holdings

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. It's great to see that Yestar Healthcare Holdings insiders own 59% of the company, worth about HK$36m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Yestar Healthcare Holdings Insider Transactions Indicate?

An insider hasn't bought Yestar Healthcare Holdings stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 5 warning signs for Yestar Healthcare Holdings (of which 4 are a bit unpleasant!) you should know about.

Of course Yestar Healthcare 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 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.