Selling CN¥29m Of Stock Was Lucrative Decision For Zhi Sheng Group Holdings Insiders
While Zhi Sheng Group Holdings Limited (HKG:8370) shareholders have had a good week with the stock up 15%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell CN¥29m worth of stock in the past 12 months. This could be a sign of impending weakness.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Zhi Sheng Group Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Ditang Zhang, for HK$29m worth of shares, at about HK$5.94 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$6.60. 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 41% of Ditang Zhang's stake. The only individual insider seller over the last year was Ditang Zhang.
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!
View our latest analysis for Zhi Sheng Group Holdings
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Does Zhi Sheng Group Holdings Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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 Zhi Sheng Group Holdings insiders own 53% of the company, worth about HK$551m. 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 Does This Data Suggest About Zhi Sheng Group Holdings Insiders?
The fact that there have been no Zhi Sheng Group 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 Zhi Sheng Group Holdings insider transactions don't fill us with confidence. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.