Insiders Who Sold CN¥33m Of AInnovation Technology Group Made The Right Call

While it’s been a great week for AInnovation Technology Group Co., Ltd (HKG:2121) shareholders after stock gained 11%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell CN¥33m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for AInnovation Technology Group

The Last 12 Months Of Insider Transactions At AInnovation Technology Group

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Hui Xu, for HK$22m worth of shares, at about HK$3.06 per share. That means that an insider was selling shares at slightly below the current price (HK$6.78). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 12% of Hui Xu's holding.

In total, AInnovation Technology Group insiders sold more than they bought over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of AInnovation Technology Group

For a common shareholder, it is worth checking how many shares are held by company 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 appears that AInnovation Technology Group insiders own 16% of the company, worth about HK$618m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About AInnovation Technology Group Insiders?

The fact that there have been no AInnovation Technology Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of AInnovation Technology Group, 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. To help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in AInnovation Technology Group.

But note: AInnovation Technology Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.