Selling iMotion Automotive Technology (Suzhou) Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Even though iMotion Automotive Technology (Suzhou) Co., Ltd. (HKG:1274) has fallen by 11% over the past week , insiders who sold CN¥31m worth of stock over the past year have had less luck. Given that the average selling price of CN¥18.07 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

iMotion Automotive Technology (Suzhou) Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Mingming Huang, sold HK$24m worth of shares at a price of HK$18.30 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$13.34). So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Mingming Huang.

Mingming Huang ditched 1.74m shares over the year. The average price per share was CN¥18.07. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for iMotion Automotive Technology (Suzhou)

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of iMotion Automotive Technology (Suzhou)

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that iMotion Automotive Technology (Suzhou) insiders own 30% of the company, worth about HK$1.0b. 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 Do The iMotion Automotive Technology (Suzhou) Insider Transactions Indicate?

The fact that there have been no iMotion Automotive Technology (Suzhou) 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 iMotion Automotive Technology (Suzhou) insider transactions don’t fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. In terms of investment risks, we’ve identified 1 warning sign with iMotion Automotive Technology (Suzhou) and understanding this should be part of your investment process.

But note: iMotion Automotive Technology (Suzhou) 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.