Insiders were net sellers of Li Auto Inc.’s (NASDAQ:LI ) stock during the past year. That is, insiders sold more stock than they bought.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Li Auto
The Last 12 Months Of Insider Transactions At Li Auto
The Non-Executive Director, Xing Wang, made the biggest insider sale in the last 12 months. That single transaction was for US$5.5m worth of shares at a price of US$27.30 each. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$22.59. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Xing Wang.
Xing Wang ditched 388.01k shares over the year. The average price per share was CN¥27.55. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Li Auto Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Li Auto insiders own 32% of the company, worth about US$7.1b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Li Auto Tell Us?
The fact that there have been no Li Auto insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of Li Auto, we can’t say the same about the selling of shares. While we like knowing 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. In terms of investment risks, we’ve identified 1 warning sign with Li Auto and understanding it should be part of your investment process.
Of course Li Auto 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.
What are the risks and opportunities for Li Auto?
Li Auto Inc., through its subsidiaries, designs, develops, manufactures, and sells new energy vehicles in the People’s Republic of China.
Rewards
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Trading at 59.7% below our estimate of its fair value
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Earnings are forecast to grow 60.88% per year
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Earnings have grown 60.7% per year over the past 5 years
Risks
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Volatile share price over the past 3 months
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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.
Read More: 29%of this Li Auto Inc. (NASDAQ:LI) insider’s holdings were sold in the last year