Insiders Could Have Profited By Holding onto Perfectech International Holdings Shares Despite 16% Drop

Despite the fact that Perfectech International Holdings Limited's (HKG:765) value has dropped 16% in the last week insiders who sold HK$53m worth of stock in the past 12 months have had less success. Given that the average selling price of HK$0.64 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Perfectech International Holdings

In the last twelve months, the biggest single sale by an insider was when the insider, Jun Zhai, sold HK$53m worth of shares at a price of HK$0.64 per share. 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$0.26. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Jun Zhai.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Perfectech International Holdings

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Insider Ownership Of Perfectech International Holdings

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. From our data, it seems that Perfectech International Holdings insiders own 7.6% of the company, worth about HK$9.5m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Perfectech International Holdings Insiders?

The fact that there have been no Perfectech International Holdings insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Perfectech International Holdings insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Perfectech International Holdings has 4 warning signs (2 don't sit too well with us!) that deserve your attention before going any further with your analysis.

But note: Perfectech International Holdings 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.