Keep An Eye On Mewah International As Insider Stock Selling Hits US$8.3m

While Mewah International Inc. (SGX:MV4) shareholders have had a good week with the stock up 11%, they shouldn't let their guards down. The fact that insiders chose to dispose of US$8.3m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Mewah International

Mewah International Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Seng Cheo, for S$8.3m worth of shares, at about S$0.42 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of S$0.29. So it may not shed much light on insider confidence at current levels. Seng Cheo was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Mewah International Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 21% of Mewah International shares, worth about S$91m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Mewah International Insider Transactions Indicate?

The fact that there have been no Mewah International insider transactions recently certainly doesn't bother us. Our analysis of Mewah International insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Mewah International. Case in point: We've spotted 1 warning sign for Mewah International you should be aware of.

But note: Mewah International 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.