We wouldn't blame Shenzhen Pagoda Industrial (Group) Corporation Limited (HKG:2411) shareholders if they were a little worried about the fact that Yue Jiao, the Executive Deputy GM & Executive Director recently netted about HK$6.8m selling shares at an average price of HK$1.56. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.
View our latest analysis for Shenzhen Pagoda Industrial (Group)
Shenzhen Pagoda Industrial (Group) Insider Transactions Over The Last Year
In fact, the recent sale by Yue Jiao was the biggest sale of Shenzhen Pagoda Industrial (Group) shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$2.19. 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. We note that the biggest single sale was only 13% of Yue Jiao's holding.
Yue Jiao sold a total of 17.51m shares over the year at an average price of CN¥2.24. The chart below shows insider transactions (by companies and 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!
I will like Shenzhen Pagoda Industrial (Group) better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of Shenzhen Pagoda Industrial (Group)
For a common shareholder, it is worth checking how many shares are held by company 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. It's great to see that Shenzhen Pagoda Industrial (Group) insiders own 27% of the company, worth about HK$934m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Shenzhen Pagoda Industrial (Group) Insider Transactions Indicate?
An insider sold Shenzhen Pagoda Industrial (Group) shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. 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. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 2 warning signs with Shenzhen Pagoda Industrial (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.