Insiders At HG Semiconductor Sold CN¥44m Of Stock Potentially Indicating Weakness

While HG Semiconductor Limited (HKG:6908) shareholders have had a good week with the stock up 33%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell CN¥44m worth of stock in the past 12 months. This could be a sign of impending weakness.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for HG Semiconductor

HG Semiconductor Insider Transactions Over The Last Year

The Executive Director, Yi Wen Zhao, made the biggest insider sale in the last 12 months. That single transaction was for HK$44m worth of shares at a price of HK$1.10 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.69). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Yi Wen Zhao.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Does HG Semiconductor Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 HG Semiconductor insiders own 47% of the company, worth about HK$245m. 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 Does This Data Suggest About HG Semiconductor Insiders?

It doesn't really mean much that no insider has traded HG Semiconductor shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of HG Semiconductor insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that HG Semiconductor is showing 5 warning signs in our investment analysis, and 2 of those are significant...

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.