Insiders were net sellers of Bairong Inc.'s (HKG:6608 ) stock during the past year. That is, insiders sold more stock than they bought.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Bairong
The Last 12 Months Of Insider Transactions At Bairong
Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Linsen Bai, for HK$1.2m worth of shares, at about HK$10.28 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$12.78. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 2.1% of Linsen Bai's holding. Linsen Bai was the only individual insider to sell shares in the last twelve months.
Linsen Bai sold a total of 1.32m shares over the year at an average price of CN¥9.98. 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!
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Insiders At Bairong Have Sold Stock Recently
The last three months saw significant insider selling at Bairong. In total, Non-Executive Director Linsen Bai dumped HK$5.6m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Bairong
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Bairong insiders own 19% of the company, currently worth about HK$1.2b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Bairong Tell Us?
An insider hasn't bought Bairong stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Bairong is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Bairong. Every company has risks, and we've spotted 1 warning sign for Bairong 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 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.