Selling Star CM Holdings Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Even though Star CM Holdings Limited (HKG:6698) has fallen by 12% over the past week , insiders who sold CN¥100m worth of stock over the past year have had less luck. The average selling price of CN¥4.95 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

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

Over the last year, we can see that the biggest insider sale was by the Executive Chairman & CEO, Ming Tian, for HK$21m worth of shares, at about HK$4.80 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 silver lining is that this sell-down took place above the latest price (HK$3.74). So it is hard to draw any strong conclusion from it. Ming Tian was the only individual insider to sell shares in the last twelve months.

Ming Tian ditched 20.23m shares over the year. The average price per share was 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).

Star CM Holdings Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Star CM Holdings shares. In total, Executive Chairman & CEO Ming Tian sold HK$12m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Star CM Holdings Boast High Insider Ownership?

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 15% of Star CM Holdings shares, worth about HK$227m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

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

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. 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 Star CM Holdings. Be aware that Star CM Holdings is showing 3 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com