Insiders at Xuan Wu Cloud Technology Holdings Limited (HKG:2392) sold CN¥73m worth of stock at an average price of CN¥0.61 a share over the past year, making the most of their investment. The company's market worth decreased by HK$67m over the past week after the stock price dropped 12%, although insiders were able to minimize their losses
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
In the last twelve months, the biggest single sale by an insider was when the insider, Yonghui Chen, sold HK$33m worth of shares at a price of HK$0.58 per share. That means that even when the share price was below the current price of HK$0.90, an insider wanted to cash in some shares. 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. It is worth noting that this sale was 56% of Yonghui Chen's holding. Notably Yonghui Chen was also the biggest buyer, having purchased HK$5.5m worth of shares.
In total, Xuan Wu Cloud Technology Holdings insiders sold more than they bought over the last year. 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!
View our latest analysis for Xuan Wu Cloud Technology Holdings
I will like Xuan Wu Cloud Technology Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Xuan Wu Cloud Technology Holdings insiders own 54% of the company, worth about HK$269m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
It doesn't really mean much that no insider has traded Xuan Wu Cloud Technology Holdings shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Xuan Wu Cloud Technology 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. For instance, we've identified 2 warning signs for Xuan Wu Cloud Technology Holdings (1 is a bit concerning) you should be aware of.
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.