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Should You Be Worried About Insider Transactions At Nanjing Sample Technology Company Limited (HKG:1708)?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Nanjing Sample Technology Company Limited (HKG:1708).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

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.

Check out our latest analysis for Nanjing Sample Technology

The Last 12 Months Of Insider Transactions At Nanjing Sample Technology

Over the last year, we can see that the biggest insider sale was by the insider, Shaofei Gong, for HK$8.9m worth of shares, at about HK$6.00 per share. So what is clear is that an insider saw fit to sell at around the current price of HK$5.88. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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. The only individual insider seller over the last year was Shaofei Gong.

You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

SEHK:1708 Recent Insider Trading, October 17th 2019

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

Nanjing Sample Technology Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Nanjing Sample Technology shares. Specifically, insider Shaofei Gong ditched CN¥8.9m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership of Nanjing Sample Technology

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Nanjing Sample Technology insiders own about HK$79m worth of shares. That equates to 1.7% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Nanjing Sample Technology Tell Us?

An insider sold Nanjing Sample Technology shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! Along with insider transactions, I recommend checking if Nanjing Sample Technology is growing revenue. This free chart of historic revenue and earnings should make that easy.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.