Insider Sellers Might Regret Selling Zhongmin Baihui Retail Group Shares at a Lower Price Than Current Market Value

Even though Zhongmin Baihui Retail Group Ltd. (SGX:5SR) has fallen by 11% over the past week , insiders who sold CN¥2.0m worth of stock over the past year have had less luck. The average selling price of CN¥1.00 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

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 Zhongmin Baihui Retail Group

The Last 12 Months Of Insider Transactions At Zhongmin Baihui Retail Group

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Swee Keng Lee, for S$1m worth of shares, at about 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. It's of some comfort that this sale was conducted at a price well above the current share price, which is S$0.58. So it may not tell us anything about how insiders feel about the current share price. Swee Keng Lee was the only individual insider to sell over the last year.

Swee Keng Lee sold a total of 2.00m shares over the year at an average price of CN¥1.00. 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 Zhongmin Baihui Retail Group 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.

Does Zhongmin Baihui Retail Group 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Zhongmin Baihui Retail Group insiders own 69% of the company, worth about S$76m. 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 Zhongmin Baihui Retail Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Zhongmin Baihui Retail Group shares in the last quarter. While we feel good about high insider ownership of Zhongmin Baihui Retail Group, 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. To help with this, we've discovered 5 warning signs (3 shouldn't be ignored!) that you ought to be aware of before buying any shares in Zhongmin Baihui Retail Group.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.