AI Energy Engineering Holdings' Insiders' Timely Sale May Have Helped Mitigate 12% Dip in Share Price

Insiders at AI Energy Engineering Holdings Limited (HKG:1751) sold HK$53m worth of stock at an average price of HK$0.45 a share over the past year, making the most of their investment. The company’s market cap plunged by HK$52m after price dropped by 12% last week but insiders were able to limit their loss to an extent.

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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AI Energy Engineering Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Vincent Ip, sold HK$13m worth of shares at a price of HK$0.93 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$1.34. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 78% of Vincent Ip's holding. Notably Vincent Ip was also the biggest buyer, having purchased HK$19m worth of shares.

Happily, we note that in the last year insiders paid HK$19m for 78.54m shares. But they sold 119.36m shares for HK$53m. All up, insiders sold more shares in AI Energy Engineering Holdings than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for AI Energy Engineering Holdings

I will like AI Energy Engineering Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of AI Energy Engineering Holdings

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 26% of AI Energy Engineering Holdings shares, worth about HK$101m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The AI Energy Engineering Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded AI Energy Engineering Holdings shares in the last quarter. While we feel good about high insider ownership of AI Energy Engineering Holdings, 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 AI Energy Engineering Holdings. You'd be interested to know, that we found 2 warning signs for AI Energy Engineering Holdings and we suggest you have a look.

Of course AI Energy Engineering 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.