We wouldn't blame GT Steel Construction Group Limited (HKG:8402) shareholders if they were a little worried about the fact that Cheng Yew Ong, the Founder recently netted about HK$63m selling shares at an average price of HK$0.19. Probably the most concerning element of the whole transaction is that the disposal amounted to 100% of their entire holding.
See our latest analysis for GT Steel Construction Group
The Last 12 Months Of Insider Transactions At GT Steel Construction Group
Notably, that recent sale by Cheng Yew Ong is the biggest insider sale of GT Steel Construction Group shares that we've seen in the last year. That means that even when the share price was below the current price of HK$2.32, 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. We note that the biggest single sale was 100% of Cheng Yew Ong's holding.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like GT Steel Construction Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. GT Steel Construction Group insiders own 69% of the company, currently worth about HK$770m 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 GT Steel Construction Group Insiders?
An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for GT Steel Construction Group (2 make us uncomfortable!) and we strongly recommend you look at them before investing.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.