Stock Analysis

Fulu Holdings Falls To HK$3.16, But Insiders Sold At Lower Price

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Despite the fact that Fulu Holdings Limited's (HKG:2101) value has dropped 10% in the last week insiders who sold CN¥747k worth of stock in the past 12 months have had less success. Given that the average selling price of CN¥4.98 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Fulu Holdings

In the last twelve months, the biggest single sale by an insider was when the insider, Feng Mao, sold HK$747k worth of shares at a price of HK$4.98 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$3.16. So it may not tell us anything about how insiders feel about the current share price. Feng Mao was the only individual insider to sell over the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

SEHK:2101 Insider Trading Volume September 21st 2023

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

Does Fulu Holdings 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. It's great to see that Fulu Holdings insiders own 60% of the company, worth about HK$777m. 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 Does This Data Suggest About Fulu Holdings Insiders?

The fact that there have been no Fulu Holdings insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Fulu Holdings insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Fulu Holdings. When we did our research, we found 3 warning signs for Fulu Holdings (2 can't be ignored!) that we believe deserve your full attention.

Of course Fulu Holdings 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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