Don't Ignore The Insider Selling In Fangzhou

Some Fangzhou Inc. (HKG:6086) shareholders may be a little concerned to see that the Chairman of the Board & CEO, Fangmin Xie, recently sold a substantial HK$36m worth of stock at a price of HK$3.96 per share. However, that sale only accounted for 3.3% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Fangzhou

Notably, that recent sale by Fangmin Xie is the biggest insider sale of Fangzhou shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of HK$3.85. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

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!

Check out our latest analysis for Fangzhou

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Insider Ownership Of Fangzhou

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Fangzhou insiders own 40% of the company, worth about HK$2.1b. 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 Fangzhou Tell Us?

An insider sold Fangzhou shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Fangzhou you should be aware of.

Of course Fangzhou 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.