Looking at New City Development Group Limited's (HKG:456 ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
New City Development Group Insider Transactions Over The Last Year
The Executive Chairman & Co-CEO, Junran Han, made the biggest insider sale in the last 12 months. That single transaction was for HK$8.0m worth of shares at a price of HK$0.53 each. That means that an insider was selling shares at slightly below the current price (HK$0.56). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 15% of Junran Han's stake. Junran Han was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for New City Development Group
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).
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. New City Development Group insiders own 40% of the company, currently worth about HK$48m 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 New City Development Group Tell Us?
The fact that there have been no New City Development Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of New City Development Group, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing New City Development Group. To that end, you should learn about the 4 warning signs we've spotted with New City Development Group (including 3 which make us uncomfortable).
Of course New City Development 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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