Stock Analysis

Joy Spreader Group Inc.'s (HKG:6988)) market cap declines to HK$2.5b but insiders who sold HK$5.4m stock were able to hedge their losses

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Over the past year, insiders sold HK$5.4m worth of Joy Spreader Group Inc. (HKG:6988) stock at an average price of HK$1.15 per share allowing them to get the most out of their money. The company’s market cap plunged by HK$325m after price dropped by 11% last week but insiders were able to limit their loss to an extent.

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.

See our latest analysis for Joy Spreader Group

Joy Spreader Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Xueqiang Lv, for HK$5.4m worth of shares, at about HK$1.15 per share. That means that an insider was selling shares at around the current price of HK$1.09. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Xueqiang Lv was the only individual insider to sell shares in the last twelve months.

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!

SEHK:6988 Insider Trading Volume March 14th 2023

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Insider Ownership Of Joy Spreader Group

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. Joy Spreader Group insiders own 37% of the company, currently worth about HK$944m 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.

What Might The Insider Transactions At Joy Spreader Group Tell Us?

The fact that there have been no Joy Spreader Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Joy Spreader Group, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Joy Spreader Group. Case in point: We've spotted 4 warning signs for Joy Spreader Group you should be aware of, and 2 of these make us uncomfortable.

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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