JBB Builders International Insiders Made A Wise Decision By Selling RM60m Worth Of Stock

While JBB Builders International Limited (HKG:1903) shareholders have enjoyed a good week with stock up 11%, they need remain vigilant. In spite of the relatively cheap prices, insiders made the decision to sell RM60m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

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.

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The Last 12 Months Of Insider Transactions At JBB Builders International

Over the last year, we can see that the biggest insider sale was by the Co-Founder & Non-Executive Director, Leng Ngooi, for HK$60m worth of shares, at about HK$0.60 per share. That means that an insider was selling shares at slightly below the current price (HK$1.68). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 62% of Leng Ngooi's holding. Leng Ngooi was the only individual insider to sell over the last year.

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!

See our latest analysis for JBB Builders International

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

JBB Builders International Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at JBB Builders International. Specifically, Co-Founder & Non-Executive Director Leng Ngooi ditched HK$60m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does JBB Builders International Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. JBB Builders International insiders own about HK$450m worth of shares (which is 54% of the company). 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 JBB Builders International Tell Us?

An insider sold JBB Builders International 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. 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. At Simply Wall St, we found 3 warning signs for JBB Builders International that deserve your attention before buying any shares.

But note: JBB Builders International 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.