Insider Sales At King International Investment Landed A Good Price

While it’s been a great week for King International Investment Limited (HKG:928) shareholders after stock gained 17%, they should consider it with a grain of salt. Even though stock prices were relatively low, insiders elected to sell HK$1.3m worth of stock in the last year, which could indicate some expected downturn.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At King International Investment

Over the last year, we can see that the biggest insider sale was by the Executive Director, Mengyao Wang, for HK$660k worth of shares, at about HK$0.11 per share. That means that an insider was selling shares at slightly below the current price (HK$0.12). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 1.4% of Mengyao Wang's holding. Mengyao Wang was the only individual insider to sell over the last year. Notably Mengyao Wang was also the biggest buyer, having purchased HK$15k worth of shares.

Mengyao Wang ditched 12.50m shares over the year. The average price per share was HK$0.10. 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 King International Investment

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Does King International Investment 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. It's great to see that King International Investment insiders own 48% of the company, worth about HK$105m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At King International Investment Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the King International Investment insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 4 warning signs for King International Investment (2 make us uncomfortable!) and we strongly recommend you look at these before investing.

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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.