Furniweb Holdings Insiders Forfeit On 13% Gains After Selling Stock

Last week, Furniweb Holdings Limited's (HKG:8480) stock jumped 13%, but insiders who sold RM1.1m worth of stock in over the past year are likely to be in a better position. Selling at an average price of RM0.25, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Furniweb Holdings Insider Transactions Over The Last Year

The insider, Ka Man Jim, made the biggest insider sale in the last 12 months. That single transaction was for HK$1.0m worth of shares at a price of HK$0.25 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.19. So it is hard to draw any strong conclusion from it. Ka Man Jim was the only individual insider to sell over the last year.

Ka Man Jim ditched 4.35m shares over the year. The average price per share was RM0.25. The chart below shows insider transactions (by companies and individuals) over the last year. 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 Furniweb Holdings

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Insiders At Furniweb Holdings Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Furniweb Holdings. In total, insider Ka Man Jim dumped HK$1.0m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Furniweb Holdings insiders own 12% of the company, worth about HK$20m. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Furniweb Holdings Tell Us?

An insider sold Furniweb Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Furniweb Holdings makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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. While conducting our analysis, we found that Furniweb Holdings has 2 warning signs and it would be unwise to ignore them.

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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.