Kingsoft CEO & Executive Director Tao Zou Sells 48% Of Holding

Some Kingsoft Corporation Limited (HKG:3888) shareholders may be a little concerned to see that the CEO & Executive Director, Tao Zou, recently sold a substantial HK$46m worth of stock at a price of HK$35.06 per share. That's a big disposal, and it decreased their holding size by 48%, which is notable but not too bad.

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Kingsoft Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Pak Kwan Kau, for HK$66m worth of shares, at about HK$32.04 per share. That means that even when the share price was below the current price of HK$35.26, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 2.2% of Pak Kwan Kau's holding.

Insiders in Kingsoft 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Kingsoft

I will like Kingsoft 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 Kingsoft Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Kingsoft insiders own about HK$9.4b worth of shares (which is 19% of the company). 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 Kingsoft Insiders?

An insider hasn't bought Kingsoft stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Kingsoft makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kingsoft. Every company has risks, and we've spotted 1 warning sign for Kingsoft you should know about.

Of course Kingsoft may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.