Insider Sellers Might Regret Selling Yincheng Life Service Shares at a Lower Price Than Current Market Value

Despite the fact that Yincheng Life Service CO., Ltd.'s (HKG:1922) value has dropped 12% in the last week insiders who sold CN¥48m worth of stock in the past 12 months have had less success. Given that the average selling price of CN¥2.26 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

View our latest analysis for Yincheng Life Service

The Last 12 Months Of Insider Transactions At Yincheng Life Service

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Qingping Huang, sold HK$43m worth of shares at a price of HK$2.26 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$1.63. So it may not tell us anything about how insiders feel about the current share price.

All up, insiders sold more shares in Yincheng Life Service than they bought, over the last year. The sellers received a price of around CN¥2.26, on average. Insider selling doesn't make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of HK$1.63. 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 Yincheng Life Service Boast High 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. It's great to see that Yincheng Life Service insiders own 45% of the company, worth about HK$194m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Yincheng Life Service Tell Us?

It doesn't really mean much that no insider has traded Yincheng Life Service shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Yincheng Life Service insiders selling. 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. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Yincheng Life Service.

Of course Yincheng Life Service may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.