By selling CN¥808m worth of China MeiDong Auto Holdings Limited (HKG:1268) stock at an average sell price of CN¥34.27 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by HK$2.9b after the stock price dropped 13% over the past week, but insiders were spared from painful losses.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for China MeiDong Auto Holdings

The Last 12 Months Of Insider Transactions At China MeiDong Auto Holdings

In the last twelve months, the biggest single sale by an insider was when the Founder & Chairman, Fan Ye, sold HK$779m worth of shares at a price of HK$34.63 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$14.54). So it may not shed much light on insider confidence at current levels.

Insiders in China MeiDong Auto Holdings didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. China MeiDong Auto Holdings insiders own 55% of the company, currently worth about HK$10b 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 Does This Data Suggest About China MeiDong Auto Holdings Insiders?

The fact that there have been no China MeiDong Auto Holdings insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of China MeiDong Auto Holdings, we can't say the same about the selling of shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that China MeiDong Auto Holdings has 2 warning signs and it would be unwise to ignore them.

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, but not derivative transactions.

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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.