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

Easyknit International Holdings Limited's (HKG:1218) stock price has dropped 11% in the previous week, but insiders who sold HK$7.0m in stock over the past year have had less luck. The average selling price of HK$4.64 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Easyknit International Holdings

Easyknit International Holdings Insider Transactions Over The Last Year

The Co-Founder, Yuk Chu Lui, made the biggest insider sale in the last 12 months. That single transaction was for HK$3.0m worth of shares at a price of HK$4.70 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$2.50). So it is hard to draw any strong conclusion from it. Yuk Chu Lui was the only individual insider to sell over the last year.

Yuk Chu Lui divested 1.50m shares over the last 12 months at an average price of HK$4.64. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Easyknit International 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 13% of Easyknit International Holdings shares, worth about HK$25m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Do The Easyknit International Holdings Insider Transactions Indicate?

The fact that there have been no Easyknit International Holdings insider transactions recently certainly doesn't bother us. Still, the insider transactions at Easyknit International Holdings in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Easyknit International Holdings has 2 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.

But note: Easyknit International 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.