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 we’ll take a look at whether insiders have been buying or selling shares in China Parenting Network Holdings Limited (HKG:1736).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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 China Parenting Network Holdings
China Parenting Network Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when CFO, Company Secretary & Executive Director Lake Mozi Zhang sold HK$13m worth of shares at a price of HK$0.45 per share. That is hardly a positive sign, even though it took place above the latest price (HK$0.34). So it may not tell us anything about how insiders feel about the current share price. Lake Mozi Zhang was the only individual insider to sell shares in the last twelve months.
Lake Mozi Zhang divested 57.00m shares over the last 12 months at an average price of CN¥0.39. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Many investors like to check how much of a company is owned by 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. China Parenting Network Holdings insiders own 57% of the company, currently worth about HK$192m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At China Parenting Network Holdings Tell Us?
It doesn’t really mean much that no insider has traded China Parenting Network Holdings shares in the last quarter. While we feel good about high insider ownership of China Parenting Network Holdings, we can’t say the same about the selling of shares. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.