We'd be surprised if Sheung Moon Holdings Limited (HKG:8523) shareholders haven't noticed that the Chairman & Compliance Officer, Sze Wo Tang, recently sold HK$3.9m worth of stock at HK$0.39 per share. However, the silver lining is that the sale only reduced their total holding by 3.3%, so we're hesitant to read anything much into it, on its own.
See our latest analysis for Sheung Moon Holdings
The Last 12 Months Of Insider Transactions At Sheung Moon Holdings
In fact, the recent sale by Sze Wo Tang was the biggest sale of Sheung Moon Holdings shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of HK$0.39. 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. It is worth noting that this sale was only 3.3% of Sze Wo Tang's holding.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Sheung Moon Holdings 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 Of Sheung Moon Holdings
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. Sheung Moon Holdings insiders own 76% of the company, currently worth about HK$119m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Sheung Moon Holdings Insider Transactions Indicate?
An insider sold Sheung Moon Holdings shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. 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. Every company has risks, and we've spotted 5 warning signs for Sheung Moon Holdings (of which 3 are concerning!) you should know about.
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.