Despite the fact that Frontier Services Group Limited (HKG:500) stock rose 19% last week, insiders who sold HK$10m worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of HK$0.25, which is higher than the current price, may have been the best decision.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Frontier Services Group
Frontier Services Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Xiaopeng Li, for HK$10m worth of shares, at about HK$0.25 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$0.20. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Xiaopeng Li.
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).
Does Frontier Services Group Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 11% of Frontier Services Group shares, worth about HK$53m, 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.
So What Does This Data Suggest About Frontier Services Group Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Frontier Services Group insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 4 warning signs with Frontier Services Group and understanding these should be part of your investment process.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.