Despite the fact that Phoenix Media Investment (Holdings) Limited (HKG:2008) stock rose 14% last week, insiders who sold HK$7.8m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of HK$2.15, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The insider, Ya-fang Hsieh, made the biggest insider sale in the last 12 months. That single transaction was for HK$6.2m worth of shares at a price of HK$2.19 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$1.42). So it may not tell us anything about how insiders feel about the current share price. Ya-fang Hsieh was the only individual insider to sell shares in the last twelve months.
Ya-fang Hsieh ditched 3.65m shares over the year. The average price per share was HK$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!
Check out our latest analysis for Phoenix Media Investment (Holdings)
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own HK$35m worth of Phoenix Media Investment (Holdings) stock, about 4.9% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.
There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Phoenix Media Investment (Holdings) insiders. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Phoenix Media Investment (Holdings) and understanding this should be part of your investment process.
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.