Despite the fact that SinoMab BioScience Limited (HKG:3681) stock rose 11% last week, insiders who sold CN¥4.3m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of CN¥1.80, which is higher than the current price, may have been the best move for these insiders because 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.
Check out our latest analysis for SinoMab BioScience
SinoMab BioScience Insider Transactions Over The Last Year
The President of China & Executive Director, Shanchun Wang, made the biggest insider sale in the last 12 months. That single transaction was for HK$4.3m worth of shares at a price of HK$1.80 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 good news is that this large sale was at well above current price of HK$1.11. 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 Shanchun Wang.
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!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of SinoMab BioScience
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. SinoMab BioScience insiders own about HK$339m worth of shares. That equates to 28% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At SinoMab BioScience Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of SinoMab BioScience, we can't say the same about the selling of shares. While it's good to be aware of 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. Every company has risks, and we've spotted 3 warning signs for SinoMab BioScience you should know about.
Of course SinoMab BioScience 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 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.