Consun Pharmaceutical Group Limited (HKG:1681) shareholders (or potential shareholders) will be happy to see that the CEO & Executive Chairman, Meng An, recently bought a whopping HK$5.4m worth of stock, at a price of HK$5.64. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 5.8%.
Check out our latest analysis for Consun Pharmaceutical Group
The Last 12 Months Of Insider Transactions At Consun Pharmaceutical Group
The insider, Yubao An, made the biggest insider sale in the last 12 months. That single transaction was for HK$62m worth of shares at a price of HK$6.70 each. 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$5.67). So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid HK$22m for 4.14m shares. But insiders sold 10.51m shares worth HK$70m. All up, insiders sold more shares in Consun Pharmaceutical Group than they bought, over the last year. The sellers received a price of around CN¥6.68, on average. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is HK$5.67). The chart below shows insider transactions (by companies and individuals) over the last year. 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: Most of them are flying under the radar).
Does Consun Pharmaceutical Group 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Consun Pharmaceutical Group insiders own 45% of the company, currently worth about HK$2.1b based on the recent share price. 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 Does This Data Suggest About Consun Pharmaceutical Group Insiders?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by some insiders suggests they are well aligned and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Consun Pharmaceutical Group you should be aware of.
But note: Consun Pharmaceutical Group 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.
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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.