One Kingsoft Insider Has Reduced Their Stake

From what we can see, insiders were net sellers in Kingsoft Corporation Limited's (HKG:3888 ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

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.

Check out our latest analysis for Kingsoft

The Last 12 Months Of Insider Transactions At Kingsoft

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Pak Kwan Kau, sold HK$66m worth of shares at a price of HK$32.04 per share. That means that an insider was selling shares at slightly below the current price (HK$44.90). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 2.2% of Pak Kwan Kau's holding. The only individual insider seller over the last year was Pak Kwan Kau.

Pak Kwan Kau divested 5.00m shares over the last 12 months at an average price of CN¥32.26. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

Kingsoft Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Kingsoft shares. Specifically, Non-Executive Director Pak Kwan Kau ditched HK$161m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Kingsoft insiders own 20% of the company, currently worth about HK$12b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Kingsoft Insiders?

An insider sold Kingsoft 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 Kingsoft 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. You'd be interested to know, that we found 1 warning sign for Kingsoft and we suggest you have a look.

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 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.