Insiders Who Sold HK$11m Of Enviro Energy International Holdings Made The Right Call

While it’s been a great week for Enviro Energy International Holdings Limited (HKG:1102) shareholders after stock gained 14%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell HK$11m 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.

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The Last 12 Months Of Insider Transactions At Enviro Energy International Holdings

The Executive Director, Lihui Pan, made the biggest insider sale in the last 12 months. That single transaction was for HK$11m worth of shares at a price of HK$0.05 each. That means that an insider was selling shares at slightly below the current price (HK$0.065). 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 100% of Lihui Pan's holding. Lihui Pan was the only individual insider to sell over the last year. Notably Lihui Pan was also the biggest buyer, having purchased HK$1.3m worth of shares.

Lihui Pan sold a total of 228.27m shares over the year at an average price of HK$0.05. 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!

View our latest analysis for Enviro Energy International Holdings

I will like Enviro Energy International Holdings 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 Enviro Energy International Holdings Have Sold Stock Recently

The last quarter saw substantial insider selling of Enviro Energy International Holdings shares. In total, Executive Director Lihui Pan dumped HK$11m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Enviro Energy International Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own HK$1.8m worth of Enviro Energy International Holdings stock, about 2.0% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Enviro Energy International Holdings Insiders?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. We'd certainly practice some caution before buying! 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. To that end, you should learn about the 6 warning signs we've spotted with Enviro Energy International Holdings (including 2 which don't sit too well with us).

Of course Enviro Energy International Holdings 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.