Insiders Could Have Profited By Holding onto Graphjet Technology Shares Despite 19% Drop

Even though Graphjet Technology (NASDAQ:GTI) has fallen by 19% over the past week , insiders who sold US$3.8m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$1.30 is still below the current share price.

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.

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Graphjet Technology Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Sing Wong, for US$1.3m worth of shares, at about US$2.17 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$0.087). So it may not shed much light on insider confidence at current levels.

In the last year Graphjet Technology insiders didn't buy any company stock. 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!

Check out our latest analysis for Graphjet Technology

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Graphjet Technology Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Graphjet Technology. In total, insider Swee Hoo sold US$464k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Graphjet Technology

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Graphjet Technology insiders own about US$7.2m worth of shares (which is 51% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Graphjet Technology Insiders?

An insider hasn't bought Graphjet Technology stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. When we did our research, we found 6 warning signs for Graphjet Technology (3 are a bit unpleasant!) that we believe deserve your full attention.

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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.