We wouldn't blame China Wantian Holdings Limited (HKG:1854) shareholders if they were a little worried about the fact that Chi Ching Liu, the Executive Director recently netted about HK$7.0m selling shares at an average price of HK$0.70. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 5.0%.

China Wantian Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Chi Ching Liu is the biggest insider sale of China Wantian Holdings shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (HK$1.18). 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. 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. We note that the biggest single sale was only 5.0% of Chi Ching Liu's holding.

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!

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.

Insider Ownership

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that China Wantian Holdings insiders own 17% of the company, worth about HK$388m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At China Wantian Holdings Tell Us?

An insider sold China Wantian Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 2 warning signs we've spotted with China Wantian Holdings (including 1 which shouldn't be ignored).

Of course China Wantian Holdings 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.