Insiders Of IRC Retain US$39m Of Investment Selling At Higher Prices

Last week, IRC Limited's (HKG:1029) stock jumped 13%, but insiders who sold US$39m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$0.095, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

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 IRC

IRC Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Dmitry Bakatin, for HK$39m worth of shares, at about HK$0.095 per share. That means that an insider was selling shares at slightly below the current price (HK$0.12). 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 100% of Dmitry Bakatin's holding. Dmitry Bakatin 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Does IRC 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. IRC insiders own about HK$173m worth of shares. That equates to 17% 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 Does This Data Suggest About IRC Insiders?

It doesn't really mean much that no insider has traded IRC shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of IRC insider transactions don't fill us with confidence. 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of IRC.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.