14% Of This PCCW Insider's Holdings Were Sold

Insiders were net sellers of PCCW Limited's (HKG:8 ) stock during the past year. That is, insiders sold more stock than they bought.

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.

See our latest analysis for PCCW

PCCW Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Acting Group MD, Hon Hing Hui, for HK$3.4m worth of shares, at about HK$3.89 per share. That means that even when the share price was below the current price of HK$4.41, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 14% of Hon Hing Hui's stake. The only individual insider seller over the last year was Hon Hing Hui.

Hon Hing Hui divested 2.62m shares over the last 12 months at an average price of HK$3.87. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like PCCW 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.

Insider Ownership Of PCCW

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. It's great to see that PCCW insiders own 7.0% of the company, worth about HK$2.4b. 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 Do The PCCW Insider Transactions Indicate?

It doesn't really mean much that no insider has traded PCCW shares in the last quarter. While we feel good about high insider ownership of PCCW, 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. For example, PCCW has 2 warning signs (and 1 which is significant) we think you should know about.

But note: PCCW 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.