Selling CN¥16m Of China Sandi Holdings Stock Rewarded Insiders

While China Sandi Holdings Limited (HKG:910) shareholders have had a good week with the stock up 34%, they shouldn't let their guards down. Even though stock prices were relatively low, insiders elected to sell CN¥16m worth of stock in the last year, which could indicate some expected downturn.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for China Sandi Holdings

China Sandi Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Jiadi Guo is the biggest insider sale of China Sandi Holdings shares that we've seen in the last year. That means that even when the share price was below the current price of HK$0.039, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 14% of Jiadi Guo's stake.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At China Sandi Holdings Have Sold Stock Recently

The last three months saw significant insider selling at China Sandi Holdings. In total, Executive Chairman Jiadi Guo sold HK$16m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does China Sandi Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. China Sandi Holdings insiders own about HK$132m worth of shares (which is 67% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The China Sandi Holdings Insider Transactions Indicate?

An insider hasn't bought China Sandi Holdings stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Sandi Holdings. Case in point: We've spotted 4 warning signs for China Sandi Holdings you should be aware of, and 3 of them can't be ignored.

But note: China Sandi 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.