It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in New Century Group Hong Kong Limited (HKG:234).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
New Century Group Hong Kong Insider Transactions Over The Last Year
Wilson Ng made the biggest insider sale in the last 12 months. That single transaction was for HK$4.0m worth of shares at a price of HK$0.13 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of HK$0.14. While their view may have changed since they sold, this isn’t a particularly bullish sign. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was 100% of Wilson Ng’s holding.
We note that in the last year insiders divested 82.53m shares for a total of HK$11m. All up, insiders sold more shares in New Century Group Hong Kong than they bought, over the last year. The average sell price was around HK$0.13. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
New Century Group Hong Kong Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at New Century Group Hong Kong. Specifically, insiders ditched HK$11m 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.
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. Insiders own 7.6% of New Century Group Hong Kong shares, worth about HK$60m, according to our data. However, it’s possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At New Century Group Hong Kong Tell Us?
Insiders haven’t bought New Century Group Hong Kong stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! 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, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.