Insiders At Yuexiu Property Sold CN¥15m In Stock, Alluding To Potential Weakness

The fact that multiple Yuexiu Property Company Limited (HKG:123) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Yuexiu Property

Yuexiu Property Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, Lup Fat Yu, sold HK$6.3m worth of shares at a price of HK$10.42 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$8.84). So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 315.59k shares worth HK$3.0m. But they sold 2.19m shares for HK$15m. All up, insiders sold more shares in Yuexiu Property than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At Yuexiu Property Have Sold Stock Recently

We've seen more insider selling than insider buying at Yuexiu Property recently. In total, Executive Chairman Zhaoyuan Lin sold HK$5.2m worth of shares in that time. On the other hand we note Executive Vice Chairman & GM Feng Lin bought HK$747k worth of shares. Generally this level of net selling might be considered a bit bearish.

Does Yuexiu Property Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Yuexiu Property insiders own 0.1% of the company, worth about HK$52m. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Yuexiu Property Tell Us?

The stark truth for Yuexiu Property is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Yuexiu Property is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. Our analysis shows 4 warning signs for Yuexiu Property (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.