Insider Sellers Might Regret Selling Star CM Holdings Shares at a Lower Price Than Current Market Value

Star CM Holdings Limited's (HKG:6698) value has fallen 31% in the last week, but insiders who sold CN¥100m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥4.95 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Star CM Holdings

The Last 12 Months Of Insider Transactions At Star CM Holdings

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman & CEO, Ming Tian, sold HK$21m worth of shares at a price of HK$4.80 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$2.33. So it is hard to draw any strong conclusion from it. Ming Tian was the only individual insider to sell over the last year.

Ming Tian divested 20.23m shares over the last 12 months at an average price of CN¥4.95. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Star CM Holdings insiders own about HK$139m worth of shares. That equates to 15% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Star CM Holdings Insiders?

It doesn't really mean much that no insider has traded Star CM Holdings shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Star CM Holdings insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Star CM Holdings. In terms of investment risks, we've identified 1 warning sign with Star CM Holdings and understanding this should be part of your investment process.

Of course Star CM Holdings 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.