Insiders probably made the right decision selling CN¥88m worth of shares earlier this year as TL Natural Gas Holdings Limited's (HKG:8536)) stock dips by 14%.

By
Simply Wall St
Published
May 12, 2022
SEHK:8536
Source: Shutterstock

Over the past year, insiders sold CN¥88m worth of TL Natural Gas Holdings Limited (HKG:8536) stock at an average price of CN¥11.32 per share allowing them to get the most out of their money. The company's market worth decreased by HK$4.6m over the past week after the stock price dropped 14%, although insiders were able to minimize their losses

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for TL Natural Gas Holdings

The Last 12 Months Of Insider Transactions At TL Natural Gas Holdings

In the last twelve months, the biggest single sale by an insider was when the CEO, Chairman & Compliance Officer, Yong Cheng Liu, sold HK$39m worth of shares at a price of HK$11.34 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.15. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Yong Cheng Liu.

Yong Cheng Liu ditched 7.80m shares over the year. The average price per share was CN¥11.32. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SEHK:8536 Insider Trading Volume May 12th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. TL Natural Gas Holdings insiders own about HK$17m worth of shares (which is 62% 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.

So What Do The TL Natural Gas Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded TL Natural Gas Holdings shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the TL Natural Gas Holdings insiders selling. 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. Be aware that TL Natural Gas Holdings is showing 4 warning signs in our investment analysis, and 2 of those are potentially serious...

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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