Despite a 14% gain in Golden Faith Group Holdings Limited's (HKG:2863) stock price this week, shareholders shouldn't let up. In spite of the relatively cheap prices, insiders made the decision to sell HK$1.9m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Golden Faith Group Holdings

The Executive Chairman Chun Hay Ko made the biggest insider purchase in the last 12 months. That single transaction was for HK$1.0m worth of shares at a price of HK$0.25 each. We do like to see buying, but this purchase was made at well below the current price of HK$0.38. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Kam-Fai Cheung ditched 7.68m shares over the year. The average price per share was HK$0.24. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Golden Faith Group Holdings

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Golden Faith Group Holdings Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Golden Faith Group Holdings insiders own about HK$198m worth of shares (which is 79% of the company). 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 Golden Faith Group Holdings Insider Transactions Indicate?

The fact that there have been no Golden Faith Group Holdings insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Golden Faith Group Holdings insiders selling. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 3 warning signs for Golden Faith Group Holdings (2 make us uncomfortable) you should be aware of.

But note: Golden Faith Group Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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.