Shanghai Realway Capital Assets Management Insider Sellers Vindicated After 34% Drop
Insiders seem to have made the most of their holdings by selling CN¥694k worth of Shanghai Realway Capital Assets Management Co., Ltd. (HKG:1835) stock at an average sell price of CN¥1.20 during the past year. The company's market valuation decreased by HK$232m after the stock price dropped 34% over the past week, but insiders were spared from painful losses.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Shanghai Realway Capital Assets Management
The insider, Lei Fan, made the biggest insider sale in the last 12 months. That single transaction was for HK$694k worth of shares at a price of HK$1.20 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$2.99. 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. 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. It is worth noting that this sale was 100% of Lei Fan's holding. Lei Fan was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Shanghai Realway Capital Assets Management
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.
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. We usually like to see fairly high levels of insider ownership. It's great to see that Shanghai Realway Capital Assets Management insiders own 86% of the company, worth about HK$396m. 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 Shanghai Realway Capital Assets Management Insider Transactions Indicate?
The fact that there have been no Shanghai Realway Capital Assets Management insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Shanghai Realway Capital Assets Management insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Shanghai Realway Capital Assets Management has 3 warning signs (and 1 which can't be ignored) we think you should know about.
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.