Have Xin Yuan Enterprises Group Insiders Been Selling Stock?

We wouldn't blame Xin Yuan Enterprises Group Limited (HKG:1748) shareholders if they were a little worried about the fact that Shaoyun Lan, a company insider, recently netted about HK$158m selling shares at an average price of HK$4.85. That diminished their holding by a very significant 52%, which arguably implies a strong desire to reallocate capital.

See our latest analysis for Xin Yuan Enterprises Group

Xin Yuan Enterprises Group Insider Transactions Over The Last Year

Notably, that recent sale by Shaoyun Lan is the biggest insider sale of Xin Yuan Enterprises Group shares that we've seen in the last year. That means that an insider was selling shares at below the current price (HK$4.85). 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. We note that the biggest single sale was 52% of Shaoyun Lan's holding.

Over the last year we saw more insider selling of Xin Yuan Enterprises Group shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Xin Yuan Enterprises Group Boast High 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. Xin Yuan Enterprises Group insiders own 73% of the company, currently worth about HK$1.6b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Xin Yuan Enterprises Group Insiders?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But since Xin Yuan Enterprises Group is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Xin Yuan Enterprises Group is showing 2 warning signs in our investment analysis, and 1 of those is concerning...

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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.