We wouldn't blame Ruicheng (China) Media Group Limited (HKG:1640) shareholders if they were a little worried about the fact that Xuejun Leng, the Executive Director recently netted about HK$24m selling shares at an average price of HK$1.64. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.
Ruicheng (China) Media Group Insider Transactions Over The Last Year
Notably, that recent sale by Xuejun Leng is the biggest insider sale of Ruicheng (China) Media Group shares that we've seen in the last year. That means that an insider was selling shares at below the current price (HK$1.64). 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. This single sale was 100% of Xuejun Leng's stake.
In the last year Ruicheng (China) Media Group insiders didn't buy any company stock. 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!
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
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Ruicheng (China) Media Group insiders own 36% of the company, worth about HK$329m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Ruicheng (China) Media Group Tell Us?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we've spotted with Ruicheng (China) Media Group (including 1 which can't be ignored).
Of course Ruicheng (China) Media Group 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.
