Read This Before Buying Mobile Internet (China) Holdings Limited (HKG:1439) Shares

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Mobile Internet (China) Holdings Limited (HKG:1439), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Mobile Internet (China) Holdings

The Last 12 Months Of Insider Transactions At Mobile Internet (China) Holdings

The insider, Dong Miao Peng, made the biggest insider sale in the last 12 months. That single transaction was for HK$12m worth of shares at a price of HK$0.092 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$0.062). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Dong Miao Peng.

Dong Miao Peng sold a total of 146.38m shares over the year at an average price of CN¥0.12. 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 growing companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Mobile Internet (China) Holdings insiders own 42% of the company, worth about HK$36m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Mobile Internet (China) Holdings Insider Transactions Indicate?

The fact that there have been no Mobile Internet (China) Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Mobile Internet (China) Holdings, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Mobile Internet (China) Holdings (of which 2 are a bit concerning!) you should know about.

But note: Mobile Internet (China) 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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