Frontage Holdings' Stock Sinks To HK$1.41, But Insiders Sold Even Lower

Even though Frontage Holdings Corporation (HKG:1521) has fallen by 10% over the past week , insiders who sold US$746k worth of stock over the past year have had less luck. Given that the average selling price of US$2.15 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Frontage Holdings

Frontage Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Executive Officer, Abdul Mutlib, for HK$544k worth of shares, at about HK$2.28 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$1.41. So it may not shed much light on insider confidence at current levels. Abdul Mutlib was the only individual insider to sell over the last year.

Abdul Mutlib divested 347.48k shares over the last 12 months at an average price of US$2.15. 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!

I will like Frontage Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Frontage Holdings Insiders Are Selling The Stock

We have seen a bit of insider selling at Frontage Holdings, over the last three months. Chief Executive Officer Abdul Mutlib only netted HK$203k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

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. We usually like to see fairly high levels of insider ownership. Our data indicates that Frontage Holdings insiders own about HK$70m worth of shares (which is 2.5% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Frontage Holdings Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Frontage Holdings. While conducting our analysis, we found that Frontage Holdings has 1 warning sign and it would be unwise to ignore this.

But note: Frontage Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.