Don't Ignore The Fact That This Insider Just Sold Some Shares In Ground International Development Limited (HKG:989)

We wouldn't blame Ground International Development Limited (HKG:989) shareholders if they were a little worried about the fact that Xintong Cui, the Chairman of the Board recently netted about HK$10.0m selling shares at an average price of HK$0.20. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.5%.

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Ground International Development Insider Transactions Over The Last Year

In fact, the recent sale by Chairman of the Board Xintong Cui was not their only sale of Ground International Development shares this year. They previously made an even bigger sale of -HK$23m worth of shares at a price of HK$0.076 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.33. 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. We note that the biggest single sale was only 8.3%of Xintong Cui's holding.

Xintong Cui divested 470.00m shares over the last 12 months at an average price of CN¥0.085. 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!

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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Ground International Development insiders own 62% of the company, worth about HK$1.2b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Ground International Development Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 5 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in Ground International Development.

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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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