Insiders at Kaisa Capital Investment Holdings Limited (HKG: 936) may have anticipated a slowdown, selling HK $ 146 million worth of shares despite low prices


Although Kaisa Capital Investment Holdings Limited (HKG: 936) fell 11% over the past week, insiders who sold HK $ 146 million of shares in the past year were less fortunate. The average sale price of HK $ 0.45 is still lower than the current share price, or in other words, insiders would have been better off holding their shares.

While we never suggest that investors should base their decisions solely on what the directors of a company have done, logic dictates that you pay attention to whether insiders are buying or selling stocks.

Check out our latest analysis for Kaisa Capital Investment Holdings

The Last 12 Months of Insider Trading at Kaisa Capital Investment Holdings

Insider Li Zeng had the biggest insider sale in the past 12 months. This single transaction involved shares valued at HK $ 146 million priced at HK $ 0.45 each. This means that an insider was selling shares at a price slightly lower than the current price (HK $ 0.78). Generally, we find it disheartening when insiders sell below the current price, as it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we cannot be sure that this means that insiders think stocks are fully valued, so it is only a weak sign. We note that the biggest single sale was 100% of Li Zeng’s stake. The only individual insider seller in the past year was Li Zeng.

Below you can see a visual representation of insider trading (by businesses and individuals) over the past 12 months. By clicking on the graph below, you can see the exact detail of each insider trade!

SEHK: 936 Insider Trading Volume October 12, 2021

If you are like me then you not want to miss it free list of growing companies that insiders buy.

Insider ownership of Kaisa Capital Investment Holdings

Another way to test the alignment between a company’s executives 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 have an incentive to build the business for the long term. Insiders of Kaisa Capital Investment Holdings hold around HK $ 78 million in shares. This equates to 9.4% of the business. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.

So what do Kaisa Capital Investment Holdings’ insider trading indicate?

We certainly don’t mind the fact that there hasn’t been any insider trading from Kaisa Capital Investment Holdings recently. Still, insider trading at Kaisa Capital Investment Holdings over the past 12 months is not very encouraging. But it’s good to see that the insiders own shares in the company. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. At Simply Wall St, we have found that Kaisa Capital Investment Holdings has 2 warning signs (1 does not suit us too much!) Which deserve your attention before going further in your analysis.

Sure Kaisa Capital Investment Holdings may not be the best stock to buy. So you might want to see this free collection of high quality companies.

For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

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