We wouldn't blame Acme International Holdings Limited (HKG:1870) shareholders if they were a little worried about the fact that Kam Tim Kwan, the Executive Chairman recently netted about HK$12m selling shares at an average price of HK$1.69. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 8.9%.
View our latest analysis for Acme International Holdings
Acme International Holdings Insider Transactions Over The Last Year
In fact, the recent sale by Executive Chairman Kam Tim Kwan was not their only sale of Acme International Holdings shares this year. Earlier in the year, they fetched HK$1.00 per share in a -HK$17m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$1.65. 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. It is worth noting that this sale was only 14% of Kam Tim Kwan's holding.
Kam Tim Kwan divested 48.50m shares over the last 12 months at an average price of HK$1.15. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Does Acme International Holdings Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Acme International Holdings insiders own 56% of the company, currently worth about HK$579m 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.
So What Does This Data Suggest About Acme International Holdings Insiders?
Unfortunately, there has been more insider selling of Acme International Holdings stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. 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. 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. When we did our research, we found 3 warning signs for Acme International Holdings (2 are potentially serious!) that we believe deserve your full attention.
Of course Acme International Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.