Selling Guanze Medical Information Industry (Holding) Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Guanze Medical Information Industry (Holding) Co., Ltd.'s (HKG:2427) value has fallen 10% in the last week, but insiders who sold CN¥5.8m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥0.51 is still lower than the current share price.

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.

View our latest analysis for Guanze Medical Information Industry (Holding)

Guanze Medical Information Industry (Holding) Insider Transactions Over The Last Year

The CEO & Chairman, Xianzhen Meng, made the biggest insider sale in the last 12 months. That single transaction was for HK$1.0m worth of shares at a price of HK$0.54 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.39. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Xianzhen Meng.

Xianzhen Meng divested 11.53m shares over the last 12 months at an average price of CN¥0.51. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insiders At Guanze Medical Information Industry (Holding) Have Sold Stock Recently

The last three months saw significant insider selling at Guanze Medical Information Industry (Holding). In total, CEO & Chairman Xianzhen Meng sold HK$5.8m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

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. Guanze Medical Information Industry (Holding) insiders own about HK$270m worth of shares (which is 74% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Guanze Medical Information Industry (Holding) Insider Transactions Indicate?

An insider hasn't bought Guanze Medical Information Industry (Holding) stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Guanze Medical Information Industry (Holding). Every company has risks, and we've spotted 5 warning signs for Guanze Medical Information Industry (Holding) (of which 2 are concerning!) you should know about.

But note: Guanze Medical Information Industry (Holding) 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.