Honorary Chairman & Executive Director Of Yinsheng Digifavor Sold 31% Of Their Shares

Some Yinsheng Digifavor Company Limited (HKG:3773) shareholders may be a little concerned to see that the Honorary Chairman & Executive Director, Junmou Huang, recently sold a substantial HK$40m worth of stock at a price of HK$2.00 per share. That sale reduced their total holding by 31% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Yinsheng Digifavor

The Last 12 Months Of Insider Transactions At Yinsheng Digifavor

In fact, the recent sale by Junmou Huang was the biggest sale of Yinsheng Digifavor shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$2.28. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 31% of Junmou Huang's holding.

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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Yinsheng Digifavor Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Yinsheng Digifavor insiders own 72% of the company, currently worth about HK$684m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Yinsheng Digifavor Insider Transactions Indicate?

An insider hasn't bought Yinsheng Digifavor stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. In terms of investment risks, we've identified 1 warning sign with Yinsheng Digifavor and understanding it should be part of your investment process.

But note: Yinsheng Digifavor 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.