Last week, China Cultural Tourism and Agriculture Group Limited's (HKG:542) stock jumped 13%, but insiders who sold HK$3.8m worth of stock in over the past year are likely to be in a better position. Selling at an average price of HK$0.12, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

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.

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The Last 12 Months Of Insider Transactions At China Cultural Tourism and Agriculture Group

The insider, Anfeng Huang, made the biggest insider sale in the last 12 months. That single transaction was for HK$1.4m worth of shares at a price of HK$0.09 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (HK$0.062). So it may not shed much light on insider confidence at current levels. Notably Anfeng Huang was also the biggest buyer, having purchased HK$3.6m worth of shares.

In the last twelve months insiders purchased 48.11m shares for HK$3.6m. On the other hand they divested 32.05m shares, for HK$3.8m. All up, insiders sold more shares in China Cultural Tourism and Agriculture Group than they bought, over the last year. They sold for an average price of about HK$0.12. Insider selling doesn't make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of HK$0.062. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for China Cultural Tourism and Agriculture Group

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China Cultural Tourism and Agriculture Group Insiders Bought Stock Recently

There was some insider buying at China Cultural Tourism and Agriculture Group over the last quarter. CEO & Executive Chairman of the Board Lijun Yang bought HK$149k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

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. It's great to see that China Cultural Tourism and Agriculture Group insiders own 66% of the company, worth about HK$313m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About China Cultural Tourism and Agriculture Group Insiders?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, China Cultural Tourism and Agriculture Group insiders are reasonably well aligned, and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 2 warning signs for China Cultural Tourism and Agriculture Group (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

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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.