We wouldn't blame Many Idea Cloud Holdings Limited (HKG:6696) shareholders if they were a little worried about the fact that Jianhui Liu, the CEO & Chairman of the Board recently netted about HK$50m selling shares at an average price of HK$0.17. That diminished their holding by a very significant 69%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At Many Idea Cloud Holdings
In fact, the recent sale by Jianhui Liu was the biggest sale of Many Idea Cloud Holdings shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of HK$0.24, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 69% of Jianhui Liu's holding.
Over the last year, we can see that insiders have bought 383.61m shares worth HK$66m. But they sold 315.12m shares for HK$52m. Overall, Many Idea Cloud Holdings insiders were net buyers during the last year. The average buy price was around HK$0.17. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Many Idea Cloud Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Many Idea Cloud Holdings Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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 Many Idea Cloud Holdings insiders own 40% of the company, worth about HK$132m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Many Idea Cloud Holdings Insider Transactions Indicate?
Insiders haven't bought Many Idea Cloud Holdings stock in the last three months, but there was some selling. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So we're happy to look past recent trading. 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 Many Idea Cloud Holdings (3 don't sit too well with us) you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
