Frontage Holdings Corporation's (HKG:1521) stock price has dropped 11% in the previous week, but insiders who sold US$746k in stock over the past year have had less luck. The average selling price of US$2.15 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Frontage Holdings
The Chief Executive Officer, Abdul Mutlib, made the biggest insider sale in the last 12 months. That single transaction was for HK$544k worth of shares at a price of HK$2.28 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$1.67. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Abdul Mutlib.
Abdul Mutlib divested 347.48k shares over the last 12 months at an average price of US$2.15. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Frontage Holdings Insiders Are Selling The Stock
We have seen a bit of insider selling at Frontage Holdings, over the last three months. Chief Executive Officer Abdul Mutlib only netted HK$203k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Does Frontage Holdings Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 2.5% of Frontage Holdings shares, worth about HK$83m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Frontage Holdings Insider Transactions Indicate?
An insider sold Frontage Holdings shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. For example - Frontage Holdings has 1 warning sign we think you should be aware of.
Of course Frontage 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.