The fact that multiple Yum China Holdings, Inc. (NYSE:YUMC) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Yum China Holdings
Yum China Holdings Insider Transactions Over The Last Year
In fact, the recent purchase by CEO & Executive Director Joey Wat was not their only trade of Yum China Holdings shares this year. They previously made a sale of -US$5.9m worth of shares at a price of US$61.94 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$44.46. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Yum China Holdings shares, than buying. 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!
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Yum China Holdings Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Yum China Holdings. We can see that CEO & Executive Director Joey Wat paid US$1.3m for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership Of Yum China Holdings
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Yum China Holdings insiders own 0.2% of the company, worth about US$38m. 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 Yum China Holdings Tell Us?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by Yum China Holdings insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Yum China Holdings.
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 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.