Mindtell Technology's Insiders' Timely Sale May Have Helped Mitigate 11% Dip in Share Price

Insiders seem to have made the most of their holdings by selling RM14m worth of Mindtell Technology Limited (HKG:8611) stock at an average sell price of RM0.45 during the past year. The company's market worth decreased by HK$47m over the past week after the stock price dropped 11%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Mindtell Technology Insider Transactions Over The Last Year

The insider, Yan Chee Liu, made the biggest insider sale in the last 12 months. That single transaction was for HK$2.5m worth of shares at a price of HK$0.13 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.85. 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. 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. We note that the biggest single sale was only 34% of Yan Chee Liu's holding. Yan Chee Liu was the only individual insider to sell shares in the last twelve months. Notably Yan Chee Liu was also the biggest buyer, having purchased HK$661k worth of shares.

Yan Chee Liu ditched 30.65m shares over the year. The average price per share was RM0.45. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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 Mindtell Technology

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Mindtell Technology Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Mindtell Technology recently. In that time, insider Yan Chee Liu dumped HK$11m worth of shares. Meanwhile insider Yan Chee Liu bought HK$661k worth , as we said above . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Mindtell Technology insiders own 56% of the company, worth about HK$221m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Mindtell Technology Tell Us?

The stark truth for Mindtell Technology is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 help with this, we've discovered 5 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Mindtell Technology.

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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.