Insiders Made Right Decision To Sell As Tonking New Energy Group Holdings Dips 10%

Over the past year, insiders sold HK$6.9m worth of Tonking New Energy Group Holdings Limited (HKG:8326) stock at an average price of HK$0.05 per share allowing them to get the most out of their money. The company's market worth decreased by HK$16m over the past week after the stock price dropped 10%, 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.

See our latest analysis for Tonking New Energy Group Holdings

The Last 12 Months Of Insider Transactions At Tonking New Energy Group Holdings

The Independent Non-Executive Director, Xiaoxiong Wang, made the biggest insider sale in the last 12 months. That single transaction was for HK$6.9m worth of shares at a price of HK$0.05 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.17. 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. It is worth noting that this sale was 81% of Xiaoxiong Wang's holding. Xiaoxiong Wang was the only individual insider to sell shares in the last twelve months.

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!

I will like Tonking New Energy Group Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Tonking New Energy Group Holdings Have Sold Stock Recently

The last three months saw significant insider selling at Tonking New Energy Group Holdings. Specifically, Independent Non-Executive Director Xiaoxiong Wang ditched HK$6.9m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. We usually like to see fairly high levels of insider ownership. Insiders own 5.2% of Tonking New Energy Group Holdings shares, worth about HK$7.1m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Tonking New Energy Group Holdings Tell Us?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Tonking New Energy Group Holdings is profitable and growing, we're not too worried by this. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we're not rushing to buy, to say the least. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Tonking New Energy Group Holdings (of which 1 shouldn't be ignored!) you should know about.

But note: Tonking New Energy Group Holdings 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.