Insiders Who Sold BHCC Holding Made The Right Call As Market Cap Slides By HK$24m

By selling S$3.1m worth of BHCC Holding Limited (HKG:1552) stock at an average sell price of S$0.23 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 10% last week, the company's market value declined by HK$24m, but insiders were able to mitigate their losses.

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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BHCC Holding Insider Transactions Over The Last Year

The insider, Lixiong Zhan, made the biggest insider sale in the last 12 months. That single transaction was for HK$1.6m worth of shares at a price of HK$0.24 each. That means that an insider was selling shares at slightly below the current price (HK$0.27). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 12% of Lixiong Zhan's holding. Lixiong Zhan was the only individual insider to sell over the last year.

Lixiong Zhan ditched 13.15m shares over the year. The average price per share was S$0.23. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for BHCC Holding

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Does BHCC Holding 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that BHCC Holding insiders own 22% of the company, worth about HK$47m. 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 Does This Data Suggest About BHCC Holding Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at BHCC Holding in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for BHCC Holding you should be aware of.

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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.