How Much Are 360 Ludashi Holdings Limited (HKG:3601) Insiders Taking Off The Table?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 360 Ludashi Holdings Limited (HKG:3601).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

See our latest analysis for 360 Ludashi Holdings

360 Ludashi Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CTO & Executive Director, Shiwei He, sold HK$2.0m worth of shares at a price of HK$3.95 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of HK$3.27. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Shiwei He.

Shiwei He divested 3.23m shares over the last 12 months at an average price of CN¥3.30. You can see the insider transactions (by companies and 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!

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Insider Ownership of 360 Ludashi Holdings

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. 360 Ludashi Holdings insiders own about HK$205m worth of shares. That equates to 22% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The 360 Ludashi Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded 360 Ludashi Holdings shares in the last quarter. While we feel good about high insider ownership of 360 Ludashi 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. For example, 360 Ludashi Holdings has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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