Selling Confidence Intelligence Holdings Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Even though Confidence Intelligence Holdings Limited (HKG:1967) has fallen by 12% over the past week , insiders who sold CN¥54m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥2.56 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Confidence Intelligence Holdings

Confidence Intelligence Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Shuntang Yuan, sold HK$50m worth of shares at a price of HK$5.00 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$0.26. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Shuntang Yuan.

Shuntang Yuan divested 21.25m shares over the last 12 months at an average price of CN¥2.56. 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!

I will like Confidence Intelligence Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Confidence Intelligence Holdings Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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's great to see that Confidence Intelligence Holdings insiders own 51% of the company, worth about HK$32m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Confidence Intelligence Holdings Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Confidence Intelligence Holdings, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for Confidence Intelligence Holdings (2 are significant!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com