Over the past year, insiders sold CN¥5.6m worth of Fujing Holdings Co., Limited (HKG:2497) stock at an average price of CN¥0.56 per share allowing them to get the most out of their money. The company’s market cap plunged by HK$95m after price dropped by 22% 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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The Last 12 Months Of Insider Transactions At Fujing Holdings

The Founder, Yonggang Zhang, made the biggest insider sale in the last 12 months. That single transaction was for HK$5.6m worth of shares at a price of HK$0.56 each. That means that even when the share price was below the current price of HK$0.66, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 2.9% of Yonggang Zhang's holding. The only individual insider seller over the last year was Yonggang Zhang.

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 Fujing Holdings

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Insiders At Fujing Holdings Have Sold Stock Recently

The last three months saw significant insider selling at Fujing Holdings. In total, Founder Yonggang Zhang sold HK$5.6m 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 Fujing Holdings Boast High 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. Fujing Holdings insiders own about HK$230m worth of shares (which is 70% of the company). 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 Does This Data Suggest About Fujing Holdings Insiders?

An insider sold Fujing Holdings shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Fujing Holdings makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. To that end, you should learn about the 3 warning signs we've spotted with Fujing Holdings (including 1 which is a bit unpleasant).

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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.