Insiders Made Right Decision To Sell As Fullshare Holdings Dips 36%

By selling CN¥13m worth of Fullshare Holdings Limited (HKG:607) stock at an average sell price of CN¥0.34 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 36% last week, the company's market value declined by HK$312m, but insiders were able to mitigate their losses.

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 Fullshare Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Xiao Heng Jiang, for HK$13m worth of shares, at about HK$0.34 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.89. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Xiao Heng Jiang's stake. The only individual insider seller over the last year was Xiao Heng Jiang.

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!

Check out our latest analysis for Fullshare Holdings

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. It's great to see that Fullshare Holdings insiders own 43% of the company, worth about HK$378m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Fullshare Holdings Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Fullshare Holdings shares in the last quarter. While we feel good about high insider ownership of Fullshare Holdings, we can't say the same about the selling of shares. 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. To help with this, we've discovered 3 warning signs (2 are concerning!) that you ought to be aware of before buying any shares in Fullshare Holdings.

But note: Fullshare Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.