One China Medical System Holdings Insider Has Reduced Their Stake

Insiders were net sellers of China Medical System Holdings Limited's (HKG:867 ) stock during the past year. That is, insiders sold more stock than they bought.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At China Medical System Holdings

The insider, Hongbing Chen, made the biggest insider sale in the last 12 months. That single transaction was for HK$35m worth of shares at a price of HK$11.54 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$14.24. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 4.3% of Hongbing Chen's holding. The only individual insider seller over the last year was Hongbing Chen.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for China Medical System Holdings

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. China Medical System Holdings insiders own 51% of the company, currently worth about HK$18b 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.

So What Do The China Medical System Holdings Insider Transactions Indicate?

The fact that there have been no China Medical System Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of China Medical System Holdings, we can't say the same about the selling of shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for China Medical System Holdings.

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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 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.