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Star Group Asia Insiders Benefitted From Selling Stock At HK$3.60
While Star Group Asia Limited (HKG:1560) shareholders have enjoyed a good week with stock up 13%, they need remain vigilant. The fact that insiders chose to dispose of HK$3.1m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
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.
Star Group Asia Insider Transactions Over The Last Year
In fact, the recent sale by Man Fai Chan was the biggest sale of Star Group Asia shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$4.52. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 1.0% of Man Fai Chan's holding.
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!
View our latest analysis for Star Group Asia
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Star Group Asia Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Star Group Asia shares. Specifically, Executive Chairman & CEO Man Fai Chan ditched HK$3.1m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of Star Group Asia
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Star Group Asia insiders own 73% of the company, currently worth about HK$488m based on the recent share price. 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 Star Group Asia Insiders?
An insider hasn't bought Star Group Asia stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. For instance, we've identified 5 warning signs for Star Group Asia (3 are potentially serious) you should be aware of.
But note: Star Group Asia may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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