Meitu Non-Executive Director Jiarong Chen Sells 50% Of Holding

Some Meitu, Inc. (HKG:1357) shareholders may be a little concerned to see that the Non-Executive Director, Jiarong Chen, recently sold a substantial HK$69m worth of stock at a price of HK$2.59 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 50% of their entire holding.

Check out our latest analysis for Meitu

Meitu Insider Transactions Over The Last Year

In fact, the recent sale by Jiarong Chen was the biggest sale of Meitu shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of HK$2.48. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Insiders in Meitu didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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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. It's great to see that Meitu insiders own 38% of the company, worth about HK$4.3b. 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 Does This Data Suggest About Meitu Insiders?

An insider sold Meitu shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Meitu is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. At Simply Wall St, we found 3 warning signs for Meitu that deserve your attention before buying any shares.

But note: Meitu 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com