Insiders Relieved After Selling Computime Group With 22% Price Dip

Insiders at Computime Group Limited (HKG:320) sold HK$2.6m worth of stock at an average price of HK$0.36 a share over the past year, making the most of their investment. The company's market worth decreased by HK$101m over the past week after the stock price dropped 22%, although insiders were able to minimize their losses

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.

View our latest analysis for Computime Group

The Last 12 Months Of Insider Transactions At Computime Group

Over the last year, we can see that the biggest insider sale was by the insider, Lap Chi Heung, for HK$893k worth of shares, at about HK$0.35 per share. That means that an insider was selling shares at slightly below the current price (HK$0.43). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 1.4% of Lap Chi Heung's holding. The only individual insider seller over the last year was Lap Chi Heung.

Happily, we note that in the last year insiders paid HK$238k for 674.00k shares. But they sold 7.38m shares for HK$2.6m. Lap Chi Heung divested 7.38m shares over the last 12 months at an average price of HK$0.36. 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!

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Insider Ownership

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. Computime Group insiders own 62% of the company, currently worth about HK$223m based on the recent share price. 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 Computime Group Insiders?

It doesn't really mean much that no insider has traded Computime Group 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 Computime Group insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Computime Group has 2 warning signs and it would be unwise to ignore them.

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.