China Cultural Tourism and Agriculture Group Limited's (HKG:542) stock price has dropped 15% in the previous week, but insiders who sold HK$39m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of HK$0.14 is still lower than the current share price.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for China Cultural Tourism and Agriculture Group
The Last 12 Months Of Insider Transactions At China Cultural Tourism and Agriculture Group
The CEO & Executive Chairman of the Board, Lijun Yang, made the biggest insider sale in the last 12 months. That single transaction was for HK$11m worth of shares at a price of HK$0.12 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$0.057. So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 90.32m shares worth HK$10m. On the other hand they divested 268.81m shares, for HK$39m. In total, China Cultural Tourism and Agriculture Group insiders sold more than they bought over the last year. The average sell price was around HK$0.14. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (HK$0.057), so it probably doesn't tell us a lot about the value on offer today. 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!
I will like China Cultural Tourism and Agriculture 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.
China Cultural Tourism and Agriculture Group Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at China Cultural Tourism and Agriculture Group. CEO & Executive Chairman of the Board Lijun Yang spent HK$787k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
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. We usually like to see fairly high levels of insider ownership. China Cultural Tourism and Agriculture Group insiders own 66% of the company, currently worth about HK$287m based on the recent share price. 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 China Cultural Tourism and Agriculture Group Tell Us?
It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The recent buying by an insider , along with high insider ownership, suggest that China Cultural Tourism and Agriculture Group insiders are fairly aligned, and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that China Cultural Tourism and Agriculture Group is showing 3 warning signs in our investment analysis, and 2 of those are concerning...
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.