This Insider Has Just Sold Shares In Central China Management

We wouldn't blame Central China Management Company Limited (HKG:9982) shareholders if they were a little worried about the fact that Po Sum Wu, the Chairman recently netted about HK$28m selling shares at an average price of HK$0.10. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.

View our latest analysis for Central China Management

The Last 12 Months Of Insider Transactions At Central China Management

In fact, the recent sale by Po Sum Wu was the biggest sale of Central China Management shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of HK$0.11, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 13% of Po Sum Wu's holding.

Po Sum Wu sold a total of 395.56m shares over the year at an average price of CN¥0.11. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Central China Management 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. Central China Management insiders own about HK$248m worth of shares (which is 58% of the company). 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 Does This Data Suggest About Central China Management Insiders?

An insider sold Central China Management shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 4 warning signs for Central China Management you should be aware of, and 1 of these makes us a bit uncomfortable.

Of course Central China Management 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.