Despite a 17% gain in China Aluminum Cans Holdings Limited's (HKG:6898) stock price this week, shareholders shouldn't let up. In spite of the relatively cheap prices, insiders made the decision to sell HK$47m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for China Aluminum Cans Holdings
China Aluminum Cans Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Executive Chairman & GM, Wan Tsang Lin, for HK$31m worth of shares, at about HK$0.40 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$0.75. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 11% of Wan Tsang Lin's holding. The only individual insider seller over the last year was Wan Tsang Lin.
Wan Tsang Lin ditched 118.00m shares over the year. The average price per share was HK$0.40. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
China Aluminum Cans Holdings Insiders Are Selling The Stock
The last three months saw significant insider selling at China Aluminum Cans Holdings. Specifically, Executive Chairman & GM Wan Tsang Lin ditched HK$31m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does China Aluminum Cans Holdings Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. China Aluminum Cans Holdings insiders own about HK$479m worth of shares (which is 67% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About China Aluminum Cans Holdings Insiders?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Aluminum Cans Holdings. When we did our research, we found 5 warning signs for China Aluminum Cans Holdings (1 is concerning!) that we believe deserve your full attention.
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 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.