This Insider Has Just Sold Shares In Meitu

Some Meitu, Inc. (HKG:1357) shareholders may be a little concerned to see that insider Wen Sheng Cai recently sold a substantial HK$65m worth of stock at a price of HK$6.67 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.1%.

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Meitu Insider Transactions Over The Last Year

Notably, that recent sale by insider Wen Sheng Cai was not the only time they sold Meitu shares this year. Earlier in the year, they fetched HK$6.43 per share in a -HK$341m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$6.70. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 5.1% of Wen Sheng Cai's stake.

All up, insiders sold more shares in Meitu than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Meitu

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Does Meitu Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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 Meitu insiders own 33% of the company, worth about HK$10b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Meitu Tell Us?

An insider hasn't bought Meitu stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Meitu is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Meitu has 3 warning signs we think you should be aware of.

Of course Meitu 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.