From what we can see, insiders were net sellers in Meitu, Inc.'s (HKG:1357 ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Meitu Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Jiarong Chen, for HK$69m worth of shares, at about HK$2.59 per share. That means that an insider was selling shares at slightly below the current price (HK$3.23). 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. 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 50% of Jiarong Chen's stake. Jiarong Chen was the only individual insider to sell shares in the last twelve months.

Jiarong Chen sold a total of 82.22m shares over the year at an average price of CN¥2.53. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Meitu Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Meitu insiders own about HK$5.3b worth of shares (which is 36% 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 Do The Meitu Insider Transactions Indicate?

The fact that there have been no Meitu insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Meitu, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Meitu has 1 warning sign we think 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.