Have Yincheng Life Service CO., Ltd. (HKG:1922) Insiders Been Selling Their Stock?

By
Simply Wall St
Published
November 09, 2021
SEHK:1922
Source: Shutterstock

Anyone interested in Yincheng Life Service CO., Ltd. (HKG:1922) should probably be aware that the Non-Executive Director, Qingping Huang, recently divested HK$1.9m worth of shares in the company, at an average price of HK$3.00 each. However, the silver lining is that the sale only reduced their total holding by 0.6%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for Yincheng Life Service

The Last 12 Months Of Insider Transactions At Yincheng Life Service

In fact, the recent sale by Non-Executive Director Qingping Huang was not their only trade of Yincheng Life Service shares this year. Earlier in the year, they spent HK$19m to buy shares at HK$4.66 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$3.40). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 4.47m shares for HK$21m. On the other hand they divested 4.34m shares, for HK$21m. In the last twelve months there was more buying than selling by Yincheng Life Service insiders. 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!

insider-trading-volume
SEHK:1922 Insider Trading Volume November 9th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Yincheng Life Service

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Yincheng Life Service insiders own about HK$666m worth of shares (which is 73% 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.

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

The stark truth for Yincheng Life Service is that there has been more insider selling than insider buying in the last three months. In contrast, they appear keener if you look at the last twelve months. We are also comforted by the high levels of insider ownership. So we're happy to look past recent trading. 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. While conducting our analysis, we found that Yincheng Life Service has 2 warning signs and it would be unwise to ignore these.

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, but not derivative transactions.

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