Insider Sellers Might Regret Selling China In-Tech Shares at a Lower Price Than Current Market Value

Even though China In-Tech Limited (HKG:464) has fallen by 14% over the past week , insiders who sold HK$23m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of HK$0.83 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, 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 China In-Tech

Over the last year, we can see that the biggest insider sale was by the insider, Hung Shun Ma, for HK$6.8m worth of shares, at about HK$1.08 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.57. So it may not shed much light on insider confidence at current levels. Notably Hung Shun Ma was also the biggest buyer, having purchased HK$12m worth of shares.

In total, China In-Tech insiders sold more than they bought over the last year. They sold for an average price of about HK$0.83. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is HK$0.57). 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!

See our latest analysis for China In-Tech

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Insiders At China In-Tech Have Sold Stock Recently

The last three months saw significant insider selling at China In-Tech. In total, insider Hung Shun Ma dumped HK$3.7m 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.

Does China In-Tech Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that China In-Tech insiders own 8.6% of the company, worth about HK$37m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About China In-Tech Insiders?

An insider hasn't bought China In-Tech stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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 instance, we've identified 6 warning signs for China In-Tech (2 are a bit concerning) you should be aware of.

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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.