Ruihe Data Technology Holdings' Insiders' Timely Sale May Have Helped Mitigate 10% Dip in Share Price

Insiders seem to have made the most of their holdings by selling CN¥6.5m worth of Ruihe Data Technology Holdings Limited (HKG:3680) stock at an average sell price of CN¥0.81 during the past year. After the stock price dropped 10% last week, the company's market value declined by HK$126m, but insiders were able to mitigate their losses.

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.

Check out our latest analysis for Ruihe Data Technology Holdings

The Last 12 Months Of Insider Transactions At Ruihe Data Technology Holdings

In the last twelve months, the biggest single sale by an insider was when the insider, Banchao Shi, sold HK$6.5m worth of shares at a price of HK$0.81 per share. That means that an insider was selling shares at slightly below the current price (HK$1.67). 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. It is worth noting that this sale was only 35% of Banchao Shi's holding. The only individual insider seller over the last year was Banchao Shi.

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!

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

Does Ruihe Data Technology Holdings 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. We usually like to see fairly high levels of insider ownership. Ruihe Data Technology Holdings insiders own about HK$387m worth of shares. That equates to 35% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Ruihe Data Technology Holdings Insiders?

The fact that there have been no Ruihe Data Technology Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Ruihe Data Technology Holdings, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ruihe Data Technology Holdings. When we did our research, we found 2 warning signs for Ruihe Data Technology Holdings (1 can't be ignored!) that we believe deserve your full attention.

But note: Ruihe Data Technology Holdings 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.