Selling Magic Empire Global Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Magic Empire Global Limited's (NASDAQ:MEGL) value has fallen 14% in the last week, but insiders who sold HK$2.2m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of HK$1.10 is still lower than 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.

Check out our latest analysis for Magic Empire Global

Magic Empire Global Insider Transactions Over The Last Year

Notably, that recent sale by CEO & Director Sze Chen was not the only time they sold Magic Empire Global shares this year. Earlier in the year, they fetched US$2.04 per share in a -US$374k sale. 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 US$0.78. So it may not shed much light on insider confidence at current levels.

Insiders in Magic Empire Global didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insiders At Magic Empire Global Have Sold Stock Recently

The last three months saw significant insider selling at Magic Empire Global. Specifically, insiders ditched US$1.1m 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

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Magic Empire Global insiders own about US$8.8m worth of shares (which is 55% of the company). 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 Magic Empire Global Insiders?

Insiders sold Magic Empire Global shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Magic Empire Global. When we did our research, we found 5 warning signs for Magic Empire Global (1 is a bit concerning!) that we believe deserve your full attention.

Of course Magic Empire Global 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.