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Selling CN¥585m worth of China Traditional Chinese Medicine Holdings Co. Limited (HKG:570) stock at high prices would have gotten insiders a handsome reward

Simply Wall St
Written by admin

Despite the fact that China Traditional Chinese Medicine Holdings Co. Limited (HKG:570) stock rose 9.4% last week, insiders who sold CN¥585m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of CN¥5.57, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for China Traditional Chinese Medicine Holdings

China Traditional Chinese Medicine Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Xiaochun Wang, sold HK$585m worth of shares at a price of HK$5.57 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$3.73. So it may not shed much light on insider confidence at current levels. Xiaochun Wang was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SEHK:570 Insider Trading Volume January 4th 2023

I will like China Traditional Chinese Medicine Holdings better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. China Traditional Chinese Medicine Holdings insiders own about HK$615m worth of shares. That equals 3.3% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About China Traditional Chinese Medicine Holdings Insiders?

The fact that there have been no China Traditional Chinese Medicine Holdings insider transactions recently certainly doesn’t bother us. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of China Traditional Chinese Medicine Holdings insider transactions don’t fill us with confidence. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course China Traditional Chinese Medicine Holdings 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, but not derivative transactions.

Valuation is complex, but we’re helping make it simple.

Find out whether China Traditional Chinese Medicine Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

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