Insider Sellers Might Regret Selling Shanghai Turbo Enterprises Shares at a Lower Price Than Current Market Value

Even though Shanghai Turbo Enterprises Ltd (SGX:AWM) has fallen by 17% over the past week , insiders who sold CN¥2.3m worth of stock over the past year have had less luck. Given that the average selling price of CN¥1.00 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Shanghai Turbo Enterprises

The Last 12 Months Of Insider Transactions At Shanghai Turbo Enterprises

In the last twelve months, the biggest single sale by an insider was when the insider, ChuanJun Lin, sold S$2.3m worth of shares at a price of S$1.00 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (S$0.02). So it is hard to draw any strong conclusion from it. ChuanJun Lin was the only individual insider to sell over the last year.

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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Shanghai Turbo Enterprises 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Shanghai Turbo Enterprises insiders own 52% of the company, worth about S$315k. 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 Shanghai Turbo Enterprises Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Shanghai Turbo Enterprises insiders selling. 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. Every company has risks, and we've spotted 2 warning signs for Shanghai Turbo Enterprises you should know about.

Of course Shanghai Turbo Enterprises may not be the best stock to buy. So you may wish to see this free collection of high quality 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.