Don't Ignore The Fact That This Insider Just Sold Some Shares In Frontage Holdings Corporation (HKG:1521)

We'd be surprised if Frontage Holdings Corporation (HKG:1521) shareholders haven't noticed that the Chairman & CEO, Zhihe Li, recently sold HK$2.3m worth of stock at HK$6.01 per share. However, the silver lining is that the sale only reduced their total holding by 2.3%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Frontage Holdings

Frontage Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Zhihe Li is the biggest insider sale of Frontage Holdings shares that we've seen in the last year. That means that even when the share price was below the current price of HK$7.12, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 2.3%of Zhihe Li's holding.

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!

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Insider Ownership of Frontage Holdings

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 2.6% of Frontage Holdings shares, worth about HK$316m. 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 Do The Frontage Holdings Insider Transactions Indicate?

An insider hasn't bought Frontage Holdings stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Frontage Holdings you should be aware of.

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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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