Insiders Who Sold Golden Faith Group Holdings Missed Out On 11% Stock Increase

Simply Wall St · 10/16 01:02

Despite the fact that Golden Faith Group Holdings Limited (HKG:2863) stock rose 11% last week, insiders who sold HK$1.2m worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of HK$0.35, which is higher than the current price, may have been the best decision.

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.

See our latest analysis for Golden Faith Group Holdings

The Last 12 Months Of Insider Transactions At Golden Faith Group Holdings

The insider, Kam-Fai Cheung, made the biggest insider sale in the last 12 months. That single transaction was for HK$1.2m worth of shares at a price of HK$0.35 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.25). So it is hard to draw any strong conclusion from it. Kam-Fai Cheung was the only individual insider to sell shares in the last twelve months.

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!

insider-trading-volume
SEHK:2863 Insider Trading Volume October 16th 2024

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Does Golden Faith Group Holdings Boast High Insider Ownership?

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. Golden Faith Group Holdings insiders own about HK$130m worth of shares (which is 79% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Golden Faith Group Holdings Insiders?

The fact that there have been no Golden Faith Group Holdings insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Golden Faith Group Holdings insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Golden Faith Group Holdings.

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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.