K2 F&B Holdings' Insiders' Timely Sale May Have Helped Mitigate 13% Dip in Share Price

By selling S$13m worth of K2 F&B Holdings Limited (HKG:2108) stock at an average sell price of S$0.23 over the last year, insiders seemed to have made the most of their holdings. The company’s market cap plunged by HK$52m after price dropped by 13% last week but insiders were able to limit their loss to an extent.

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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The Last 12 Months Of Insider Transactions At K2 F&B Holdings

In the last twelve months, the biggest single sale by an insider was when the insider, Soon Huat Toh, sold HK$13m worth of shares at a price of HK$0.23 per share. That means that an insider was selling shares at slightly below the current price (HK$0.43). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 99% of Soon Huat Toh's holding. The only individual insider seller over the last year was Soon Huat Toh.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for K2 F&B Holdings

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Does K2 F&B Holdings 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. We usually like to see fairly high levels of insider ownership. K2 F&B Holdings insiders own about HK$286m worth of shares (which is 82% 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 K2 F&B Holdings Insiders?

The fact that there have been no K2 F&B Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of K2 F&B Holdings, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing K2 F&B Holdings. For example, K2 F&B Holdings has 3 warning signs (and 1 which is significant) we think you should know about.

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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.