We wouldn't blame Microware Group Limited (HKG:1985) shareholders if they were a little worried about the fact that Shun Tsing Yang, a company insider, recently netted about HK$14m selling shares at an average price of HK$1.36. That sale reduced their total holding by 43% which is hardly insignificant, but far from the worst we've seen.
Check out our latest analysis for Microware Group
Microware Group Insider Transactions Over The Last Year
In fact, the recent sale by insider Shun Tsing Yang was not their only sale of Microware Group shares this year. Earlier in the year, they fetched HK$1.25 per share in a -HK$143m sale. That means that an insider was selling shares at below the current price (HK$1.26). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 70% of Shun Tsing Yang's holding.
Happily, we note that in the last year insiders paid HK$93m for 74.35m shares. But insiders sold 143.97m shares worth HK$179m. In total, Microware Group insiders sold more than they bought over the last year. 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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Insider Ownership Of Microware Group
Many investors like to check how much of a company is owned by 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. Microware Group insiders own about HK$195m worth of shares (which is 52% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Microware Group Tell Us?
Insiders haven't bought Microware Group stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Microware Group is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 3 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Microware Group.
Of course Microware Group 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 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com