While it's been a great week for Qi-House Holdings Limited (HKG:8395) shareholders after stock gained 37%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell HK$2.3m worth of stock in the past 12 months. This could be a sign of impending weakness.
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.
Qi-House Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Qiang Xu for HK$2.1m worth of shares, at about HK$0.38 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.93. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Qiang Xu divested 3.18m shares over the last 12 months at an average price of HK$0.74. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Of Qi-House Holdings
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Qi-House Holdings insiders own 71% of the company, worth about HK$1.0b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Qi-House Holdings Insiders?
It doesn't really mean much that no insider has traded Qi-House Holdings shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Qi-House Holdings insiders selling. 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. Every company has risks, and we've spotted 2 warning signs for Qi-House Holdings (of which 1 doesn't sit too well with us!) you should know about.
But note: Qi-House 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.