Shareholders May Not Overlook Zhixin Group Holding Insiders Selling CN¥264m In Stock

Even though Zhixin Group Holding Limited (HKG:2187) stock gained 20% last week, insiders who sold CN¥264m worth of stock over the past year are probably better off. Selling at an average price of CN¥3.10, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

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.

See our latest analysis for Zhixin Group Holding

Zhixin Group Holding Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Director Dan Ye bought HK$105m worth of shares at a price of HK$3.20 per share. That means that even when the share price was higher than HK$0.65 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Dan Ye was the only individual insider to buy shares in the last twelve months.

In total, Zhixin Group Holding insiders sold more than they bought 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!

I will like Zhixin Group Holding 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.

Does Zhixin Group Holding Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Zhixin Group Holding insiders own about HK$295m worth of shares (which is 61% of the company). 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 Zhixin Group Holding Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Zhixin Group Holding 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 Zhixin Group Holding insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zhixin Group Holding. Every company has risks, and we've spotted 5 warning signs for Zhixin Group Holding (of which 2 are a bit unpleasant!) you should know about.

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.

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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.