Some Zhengwei Group Holdings Company Limited (HKG:2147) shareholders may be a little concerned to see that the Executive Director, Qiuyun Lin, recently sold a substantial HK$7.2m worth of stock at a price of HK$0.16 per share. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.
Zhengwei Group Holdings Insider Transactions Over The Last Year
In fact, the recent sale by Qiuyun Lin was the biggest sale of Zhengwei Group Holdings shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of HK$0.15. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Qiuyun Lin ditched 103.72m shares over the year. The average price per share was CN¥0.16. 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!
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Does Zhengwei Group Holdings 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. Zhengwei Group Holdings insiders own about HK$49m worth of shares (which is 40% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Zhengwei Group Holdings Tell Us?
An insider sold Zhengwei Group Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Zhengwei Group Holdings is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 3 warning signs we've spotted with Zhengwei Group Holdings (including 1 which shouldn't be ignored).
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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.
