Maike Tube Industry Holdings Insider Sellers Vindicated After 10% Drop

Insiders at Maike Tube Industry Holdings Limited (HKG:1553) sold CN¥2.7m worth of stock at an average price of CN¥1.25 a share over the past year, making the most of their investment. The company’s market cap plunged by HK$72m after price dropped by 10% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Maike Tube Industry Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Pu Zhao, sold HK$2.7m worth of shares at a price of HK$1.25 per share. That means that even when the share price was below the current price of HK$1.42, an insider wanted to cash in some shares. 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. This single sale was just 9.3% of Pu Zhao's stake. The only individual insider seller over the last year was Pu Zhao.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Maike Tube Industry Holdings

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Maike Tube Industry Holdings Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Maike Tube Industry Holdings shares. In total, insider Pu Zhao dumped HK$2.7m 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. We usually like to see fairly high levels of insider ownership. Maike Tube Industry Holdings insiders own 45% of the company, currently worth about HK$275m based on the recent share price. 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 Do The Maike Tube Industry Holdings Insider Transactions Indicate?

An insider hasn't bought Maike Tube Industry Holdings 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. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Case in point: We've spotted 2 warning signs for Maike Tube Industry Holdings you should be aware of.

But note: Maike Tube Industry Holdings 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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