Insiders Sold HK$375m Of Citychamp Watch & Jewellery Group Stock Possibly Sending Warning Sign

Last week, Citychamp Watch & Jewellery Group Limited's (HKG:256) stock jumped 10%, but insiders who sold HK$375m worth of stock in over the past year are likely to be in a better position. Selling at an average price of HK$0.50, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, 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 Citychamp Watch & Jewellery Group

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman, Kwok Lung Hon, sold HK$133m worth of shares at a price of HK$0.70 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.096. 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 Kwok Lung Hon. Notably Kwok Lung Hon was also the biggest buyer, having purchased HK$51m worth of shares.

Kwok Lung Hon ditched 748.90m shares over the year. The average price per share was HK$0.50. 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!

View our latest analysis for Citychamp Watch & Jewellery Group

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Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Citychamp Watch & Jewellery Group insiders own 56% of the company, currently worth about HK$235m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Citychamp Watch & Jewellery Group Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Citychamp Watch & Jewellery Group insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Citychamp Watch & Jewellery Group you should be aware of, and 1 of them is potentially serious.

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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.