We wouldn't blame Kingsoft Corporation Limited (HKG:3888) shareholders if they were a little worried about the fact that Pak Kwan Kau, the Non-Executive Director recently netted about HK$66m selling shares at an average price of HK$32.04. However, that sale only accounted for 2.2% of their holding, so arguably it doesn't say much about their conviction.

The Last 12 Months Of Insider Transactions At Kingsoft

Notably, that recent sale by Pak Kwan Kau is the biggest insider sale of Kingsoft shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of HK$31.00. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Pak Kwan Kau ditched 5.00m shares over the year. The average price per share was CN¥32.26. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of Kingsoft

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Kingsoft insiders own about HK$8.4b worth of shares (which is 20% 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.

So What Do The Kingsoft Insider Transactions Indicate?

An insider sold Kingsoft shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Kingsoft is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Kingsoft, you should check out this free report on analyst forecasts for the company.

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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.