Capital Finance Holdings Insiders Selling HK$18m In Stock Relieved As Market Cap Slides To HK$863m

Insiders seem to have made the most of their holdings by selling HK$18m worth of Capital Finance Holdings Limited (HKG:8239) stock at an average sell price of HK$0.60 during the past year. The company’s market cap plunged by HK$113m after price dropped by 12% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Capital Finance Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Sheung Lok Mang, sold HK$6.6m worth of shares at a price of HK$0.51 per share. That means that an insider was selling shares at slightly below the current price (HK$9.20). 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. 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 100% of Sheung Lok Mang's stake.

In the last twelve months insiders purchased 4.37m shares for HK$14m. On the other hand they divested 30.67m shares, for HK$18m. All up, insiders sold more shares in Capital Finance Holdings than they bought, over the last year. They sold for an average price of about HK$0.60. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Capital Finance Holdings

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Insider Ownership Of Capital Finance Holdings

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. Insiders own 13% of Capital Finance Holdings shares, worth about HK$113m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Capital Finance Holdings Insiders?

The fact that there have been no Capital Finance Holdings insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Capital Finance Holdings insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Capital Finance Holdings. For instance, we've identified 2 warning signs for Capital Finance Holdings (1 is significant) you should be aware of.

But note: Capital Finance 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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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.