Have Insiders Been Selling S E A Holdings Limited (HKG:251) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in S E A Holdings Limited (HKG:251).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for S E A Holdings

The Last 12 Months Of Insider Transactions At S E A Holdings

In the last twelve months, the biggest single sale by an insider was when the CEO, Head of Finance, Lambert Lu, sold HK$3.2m worth of shares at a price of HK$7.11 per share. That means that an insider was selling shares at slightly below the current price (HK$8.05). 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 45% of Lambert Lu's stake. Lambert Lu was the only individual insider to sell over the last year. Notably Lambert Lu was also the biggest buyer, having purchased HK$40k worth of shares.

Lambert Lu divested 454.00k shares over the last 12 months at an average price of HK$7.13. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like S E A Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of S E A Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. S E A Holdings insiders own about HK$1.1b worth of shares (which is 22% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At S E A Holdings Tell Us?

The fact that there have been no S E A Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of S E A Holdings, we can't say the same about the selling of shares. 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. For instance, we've identified 3 warning signs for S E A Holdings (2 can't be ignored) you should be aware of.

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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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