While China Biotech Services Holdings Limited (HKG:8037) shareholders have enjoyed a good week with stock up 17%, they need remain vigilant. Although prices were relatively low, insiders chose to sell HK$5.0m worth of stock in the past 12 months. This could be a sign of impending weakness.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for China Biotech Services Holdings
The Last 12 Months Of Insider Transactions At China Biotech Services Holdings
Over the last year, we can see that the biggest insider sale was by the Executive Chairman & Compliance Officer, Xiaolin Liu, for HK$5.0m worth of shares, at about HK$0.40 per share. That means that an insider was selling shares at slightly below the current price (HK$0.45). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 2.3% of Xiaolin Liu's holding. Xiaolin Liu was the only individual insider to sell over the last year.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. China Biotech Services Holdings insiders own about HK$282m worth of shares (which is 64% of the company). 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 China Biotech Services Holdings Insiders?
The fact that there have been no China Biotech Services Holdings insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the China Biotech Services Holdings insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Biotech Services Holdings. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in China Biotech Services Holdings.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.