Possible Bearish Signals With Legend Strategy International Holdings Group Insiders Disposing Stock

Many Legend Strategy International Holdings Group Company Limited (HKG:1355) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Legend Strategy International Holdings Group Insider Transactions Over The Last Year

The insider, Fuer Yuan, made the biggest insider sale in the last 12 months. That single transaction was for HK$38m worth of shares at a price of HK$0.11 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.12. 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. 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 64% of Fuer Yuan's holding. Notably Fuer Yuan was also the biggest buyer, having purchased HK$35m worth of shares.

In the last twelve months insiders purchased 420.50m shares for HK$35m. But insiders sold 403.93m shares worth HK$44m. In total, Legend Strategy International Holdings Group insiders sold more than they bought over the last year. 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!

See our latest analysis for Legend Strategy International Holdings Group

I will like Legend Strategy International Holdings Group 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.

Insiders At Legend Strategy International Holdings Group Have Sold Stock Recently

There was substantially more insider selling, than buying, of Legend Strategy International Holdings Group shares over the last three months. In total, insider Fuer Yuan sold HK$38m worth of shares in that time. Meanwhile insider Baoshan Li bought HK$5.9m worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership Of Legend Strategy International Holdings Group

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 30% of Legend Strategy International Holdings Group shares, worth about HK$41m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Legend Strategy International Holdings Group Tell Us?

The stark truth for Legend Strategy International Holdings Group is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. Be aware that Legend Strategy International Holdings Group is showing 6 warning signs in our investment analysis, and 4 of those are significant...

Of course Legend Strategy International Holdings Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.