Insider Sellers Might Regret Selling Ziyuanyuan Holdings Group Shares at a Lower Price Than Current Market Value

Ziyuanyuan Holdings Group Limited's (HKG:8223) stock price has dropped 10% in the previous week, but insiders who sold CN¥58m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥1.23 is still lower than the current share price.

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 Ziyuanyuan Holdings Group

Over the last year, we can see that the biggest insider purchase was by insider Meu Ling Chan for HK$38m worth of shares, at about HK$1.38 per share. That means that even when the share price was higher than HK$0.43 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Meu Ling Chan.

Over the last year we saw more insider selling of Ziyuanyuan Holdings Group shares, than buying. 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 Ziyuanyuan Holdings Group

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Insider Ownership Of Ziyuanyuan Holdings Group

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Ziyuanyuan Holdings Group insiders own 57% of the company, currently worth about HK$127m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Ziyuanyuan Holdings Group Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Ziyuanyuan Holdings Group, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ziyuanyuan Holdings Group. When we did our research, we found 5 warning signs for Ziyuanyuan Holdings Group (3 are potentially serious!) that we believe deserve your full attention.

Of course Ziyuanyuan Holdings Group 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.