One China XLX Fertiliser Insider Has Reduced Their Stake

From what we can see, insiders were net sellers in China XLX Fertiliser Ltd.'s (HKG:1866 ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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China XLX Fertiliser Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Director, Yunhua Yan, for HK$19m worth of shares, at about HK$6.50 per share. That means that an insider was selling shares at slightly below the current price (HK$8.54). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. This single sale was just 1.2% of Yunhua Yan's stake. The only individual insider seller over the last year was Yunhua Yan.

In the last twelve months insiders purchased 2.75m shares for HK$14m. But insiders sold 5.83m shares worth HK$37m. Yunhua Yan divested 5.83m shares over the last 12 months at an average price of CN¥6.38. The chart below shows insider transactions (by companies and individuals) over the last year. 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 China XLX Fertiliser

I will like China XLX Fertiliser better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

China XLX Fertiliser Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at China XLX Fertiliser. We can see that Executive Director & Executive Deputy GM - Henan XLX Fertiliser Qingjin Zhang paid HK$2.7m for shares in the company. No-one sold. This makes one think the business has some good points.

Does China XLX Fertiliser 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that China XLX Fertiliser insiders own 18% of the company, worth about HK$2.2b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About China XLX Fertiliser Insiders?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, China XLX Fertiliser insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China XLX Fertiliser. Every company has risks, and we've spotted 3 warning signs for China XLX Fertiliser (of which 1 is a bit concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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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.