Selling China HK Power Smart Energy Group Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders
Despite the fact that China HK Power Smart Energy Group Limited's (HKG:931) value has dropped 12% in the last week insiders who sold HK$377m worth of stock in the past 12 months have had less success. The average selling price of HK$0.38 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
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.
The Last 12 Months Of Insider Transactions At China HK Power Smart Energy Group
Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Che Kin Kan, for HK$350m worth of shares, at about HK$0.39 per share. 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$0.26). So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Che Kin Kan. Notably Che Kin Kan was also the biggest buyer, having purchased HK$266m worth of shares.
Che Kin Kan divested 983.82m shares over the last 12 months at an average price of HK$0.38. 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!
Check out our latest analysis for China HK Power Smart Energy Group
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.
Insiders At China HK Power Smart Energy Group Have Sold Stock Recently
We've seen more insider selling than insider buying at China HK Power Smart Energy Group recently. In that time, Executive Chairman Che Kin Kan dumped HK$27m worth of shares. On the flip side, Executive Chairman Che Kin Kan spent HK$6.2m on purchasing shares. Generally this level of net selling might be considered a bit bearish.
Insider Ownership Of China HK Power Smart Energy Group
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that China HK Power Smart Energy Group insiders own 47% of the company, worth about HK$1.0b. 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 China HK Power Smart Energy Group Insiders?
Unfortunately, there has been more insider selling of China HK Power Smart Energy Group stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of 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. Case in point: We've spotted 1 warning sign for China HK Power Smart Energy Group you should be aware of.
But note: China HK Power Smart Energy Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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