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Don't Ignore The Fact That This Insider Just Sold Some Shares In Longhui International Holdings Limited (HKG:1007)

Simply Wall St

We wouldn't blame Longhui International Holdings Limited (HKG:1007) shareholders if they were a little worried about the fact that Shuichak Hung, the Chairman recently netted about CN¥25m selling shares at an average price of CN¥0.082. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 6.4%.

Check out our latest analysis for Longhui International Holdings

The Last 12 Months Of Insider Transactions At Longhui International Holdings

Notably, that recent sale by Chairman Shuichak Hung was not the only time they sold Longhui International Holdings shares this year. Earlier in the year, they fetched HK$0.082 per share in a -HK$24.9m sale. While insider selling is a negative, to us, it is more negative if the shares are sold 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$0.051. So it may not tell us anything about how insiders feel about the current share price.

We note that in the last year insiders divested 643000000 shares for a total of HK$58m. Longhui International Holdings insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by 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!

SEHK:1007 Recent Insider Trading, September 26th 2019

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. Longhui International Holdings insiders own about HK$280m worth of shares (which is 86% 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 Longhui International Holdings Insider Transactions Indicate?

Insiders sold Longhui International Holdings shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Of course Longhui International 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, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.