Insider Sellers Might Regret Selling Shenglong Splendecor International Shares at a Lower Price Than Current Market Value

Even though Shenglong Splendecor International Limited (HKG:8481) has fallen by 11% over the past week , insiders who sold CN¥9.3m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥0.44 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Shenglong Splendecor International

In the last twelve months, the biggest single sale by an insider was when the CEO & Executive Chairman, Yingming Sheng, sold HK$3.1m worth of shares at a price of HK$0.58 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.35). So it may not shed much light on insider confidence at current levels. Yingming Sheng was the only individual insider to sell shares in the last twelve months.

Yingming Sheng divested 21.18m shares over the last 12 months at an average price of CN¥0.44. 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 Shenglong Splendecor International

I will like Shenglong Splendecor International 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 Shenglong Splendecor International

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Shenglong Splendecor International insiders own about HK$106m worth of shares (which is 74% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Shenglong Splendecor International Tell Us?

It doesn't really mean much that no insider has traded Shenglong Splendecor International 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 Shenglong Splendecor International 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. Be aware that Shenglong Splendecor International is showing 3 warning signs in our investment analysis, and 2 of those are a bit unpleasant...

Of course Shenglong Splendecor International 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.