Some Central China Management Company Limited (HKG:9982) shareholders may be a little concerned to see that the Chairman, Po Sum Wu, recently sold a substantial HK$28m worth of stock at a price of HK$0.10 per share. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.
Central China Management Insider Transactions Over The Last Year
Notably, that recent sale by Po Sum Wu is the biggest insider sale of Central China Management shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.11. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 13% of Po Sum Wu's stake.
Po Sum Wu divested 395.56m shares over the last 12 months at an average price of CN¥0.11. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insider Ownership Of Central China Management
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Central China Management insiders own about HK$248m worth of shares (which is 58% of the company). 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 Does This Data Suggest About Central China Management Insiders?
An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Central China Management (of which 1 is potentially serious!) you should know about.
Of course Central China Management 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.