We wouldn't blame Zhixin Group Holding Limited (HKG:2187) shareholders if they were a little worried about the fact that Dan Ye, the Executive Director recently netted about HK$5.4m selling shares at an average price of HK$0.94. That diminished their holding by a very significant 99%, which arguably implies a strong desire to reallocate capital.
Zhixin Group Holding Insider Transactions Over The Last Year
Notably, that recent sale by Executive Director Dan Ye was not the only time they traded Zhixin Group Holding shares this year. Earlier in the year, they spent HK$105m to buy shares at HK$3.20 per share. That means that even when the share price was higher than HK$0.90 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Dan Ye was the only individual insider to buy shares in the last twelve months.
Over the last year we saw more insider selling of Zhixin Group Holding shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Does Zhixin Group Holding Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Zhixin Group Holding insiders own 61% of the company, currently worth about HK$408m based on the recent share price. 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 Zhixin Group Holding Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Zhixin Group Holding is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. Our analysis shows 4 warning signs for Zhixin Group Holding (2 are concerning!) and we strongly recommend you look at these before investing.
Of course Zhixin Group Holding may not be the best stock to buy. So you may wish to see this free collection of high quality 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.