Insiders Find Solace Selling CN¥112m In Stock With Ubtech Robotics' Price Down 13%

Over the past year, insiders sold CN¥112m worth of Ubtech Robotics Corp Ltd (HKG:9880) stock at an average price of CN¥56.20 per share allowing them to get the most out of their money. After the stock price dropped 13% last week, the company's market value declined by HK$6.2b, but insiders were able to mitigate their losses.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Ubtech Robotics

The Last 12 Months Of Insider Transactions At Ubtech Robotics

Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Zuoquan Xia, for HK$112m worth of shares, at about HK$56.20 per share. That means that an insider was selling shares at slightly below the current price (HK$92.80). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 13% of Zuoquan Xia's holding. Zuoquan Xia was the only individual insider to sell shares in the last twelve months.

Happily, we note that in the last year insiders paid HK$7.3m for 101.35k shares. On the other hand they divested 2.00m shares, for HK$112m. 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!

I will like Ubtech Robotics better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Ubtech Robotics Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Ubtech Robotics recently. In total, Non-Executive Director Zuoquan Xia sold HK$112m worth of shares in that time. Meanwhile insiders bought HK$7.3m worth , as we said above . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Ubtech Robotics insiders own 37% of the company, currently worth about HK$15b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Ubtech Robotics Tell Us?

Unfortunately, there has been more insider selling of Ubtech Robotics stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Ubtech Robotics (1 can't be ignored) you should be aware of.

Of course Ubtech Robotics 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.