Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In Pan Asia Data Holdings Inc. (HKG:1561)

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We'd be surprised if Pan Asia Data Holdings Inc. (HKG:1561) shareholders haven't noticed that an insider, Zhong Yuan Li, recently sold HK$2.2m worth of stock at HK$2.00 per share. However, the silver lining is that the sale only reduced their total holding by 3.2%, so we're hesitant to read anything much into it, on its own.

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Pan Asia Data Holdings Insider Transactions Over The Last Year

Notably, that recent sale by insider Zhong Yuan Li was not the only time they traded Pan Asia Data Holdings shares this year. They previously purchased HK$120m worth of shares at a price of HK$1.98 per share. That implies that an insider found the current price of HK$2.00 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Zhong Yuan Li. We note that Zhong Yuan Li was also the biggest seller.

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!

SEHK:1561 Insider Trading Volume February 24th 2022

Pan Asia Data Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Pan Asia Data Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Pan Asia Data Holdings insiders own about HK$222m worth of shares. That equates to 15% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Pan Asia Data Holdings Tell Us?

An insider hasn't bought Pan Asia Data Holdings stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. 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 help with this, we've discovered 3 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Pan Asia Data Holdings.

But note: Pan Asia Data 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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