Fenbi Ltd.'s (HKG:2469) stock price has dropped 10% in the previous week, but insiders who sold CN¥134m in stock over the past year have had less luck. Given that the average selling price of CN¥5.11 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Fenbi

Fenbi Insider Transactions Over The Last Year

The Non-Executive Director, Xin Li, made the biggest insider sale in the last 12 months. That single transaction was for HK$54m worth of shares at a price of HK$4.94 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$4.11. So it may not tell us anything about how insiders feel about the current share price. Xin Li was the only individual insider to sell over the last year.

Xin Li ditched 26.22m shares over the year. The average price per share was CN¥5.11. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Fenbi better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Fenbi Insiders Are Selling The Stock

The last three months saw significant insider selling at Fenbi. In total, Non-Executive Director Xin Li sold HK$134m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Fenbi Boast High 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. 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 Fenbi insiders own 31% of the company, worth about HK$2.8b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Fenbi Tell Us?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Fenbi.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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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.