Selling HK$7.8m Of Stock Was Lucrative Decision For WebX International Holdings Insiders

While it’s been a great week for WebX International Holdings Company Limited (HKG:8521) shareholders after stock gained 11%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell HK$7.8m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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WebX International Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Yingyang Li, for HK$7.8m worth of shares, at about HK$0.31 per share. That means that even when the share price was below the current price of HK$0.84, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 31% of Yingyang Li's stake. Yingyang Li was the only individual insider to sell shares in the last twelve months.

Yingyang Li sold a total of 25.59m shares over the year at an average price of HK$0.31. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for WebX International Holdings

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Insider Ownership

Many investors like to check how much of a company is owned by 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. WebX International Holdings insiders own about HK$243m worth of shares (which is 45% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The WebX International Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded WebX International Holdings shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of WebX International Holdings insider transactions don't fill us with confidence. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, WebX International Holdings has 2 warning signs (and 1 which is concerning) we think you should know about.

Of course WebX International Holdings 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.