We wouldn't blame $MEITUAN-W(03690)$ shareholders if they were a little worried about the fact that Rongjun Mu, the Co-Founder recently netted about HK$33m selling shares at an average price of HK$196. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Meituan
In the last twelve months, the biggest single sale by an insider was when the insider, Nanpeng Shen, sold HK$768m worth of shares at a price of HK$287 per share. 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$198). So it is hard to draw any strong conclusion from it.
Insiders in Meituan didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below.
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. Meituan insiders own 12% of the company, currently worth about HK$150b based on the recent share price. 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 Meituan Insiders?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.
source: simplywall
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