Possible Signal As Wealthink AI-Innovation Capital Insiders Sell HK$5.1m In Stock

Wealthink AI-Innovation Capital Limited's (HKG:1140) stock rose 13% last week, but insiders who sold HK$5.1m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of HK$0.23, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Wealthink AI-Innovation Capital

The insider, Fang Yang, made the biggest insider sale in the last 12 months. That single transaction was for HK$3.0m worth of shares at a price of HK$0.22 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.16. So it is hard to draw any strong conclusion from it. Fang Yang was the only individual insider to sell over the last year. Notably Fang Yang was also the biggest buyer, having purchased HK$717k worth of shares.

Over the last year, we can see that insiders have bought 3.42m shares worth HK$717k. But insiders sold 22.38m shares worth HK$5.1m. Fang Yang ditched 22.38m shares over the year. The average price per share was HK$0.23. The chart below shows insider transactions (by companies and individuals) over the last year. 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 Wealthink AI-Innovation Capital

I will like Wealthink AI-Innovation Capital 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 Wealthink AI-Innovation Capital Have Sold Stock Recently

We've seen more insider selling than insider buying at Wealthink AI-Innovation Capital recently. In total, insider Fang Yang sold HK$5.1m worth of shares in that time. On the flip side, insiders spent HK$717k on purchasing shares (as mentioned 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

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. Insiders own 14% of Wealthink AI-Innovation Capital shares, worth about HK$273m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Wealthink AI-Innovation Capital Insiders?

The insider sales have outweighed the insider buying, at Wealthink AI-Innovation Capital, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Wealthink AI-Innovation Capital is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Wealthink AI-Innovation Capital. While conducting our analysis, we found that Wealthink AI-Innovation Capital has 3 warning signs and it would be unwise to ignore these.

But note: Wealthink AI-Innovation Capital 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.