Insiders Sold Wai Chun Bio-Technology At HK$0.11, Meanwhile Stock Sits Near HK$0.092

Wai Chun Bio-Technology Limited's (HKG:660) value has fallen 15% in the last week, but insiders who sold HK$2.4m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of HK$0.11 is still lower than the current share price.

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 Wai Chun Bio-Technology

The Last 12 Months Of Insider Transactions At Wai Chun Bio-Technology

The insider Guanyu Chen made the biggest insider purchase in the last 12 months. That single transaction was for HK$1.4m worth of shares at a price of HK$0.097 each. That means that even when the share price was higher than HK$0.092 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Guanyu Chen.

All up, insiders sold more shares in Wai Chun Bio-Technology than they bought, over the last year. They sold for an average price of about HK$0.11. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (HK$0.092), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Wai Chun Bio-Technology insiders own 100% of the company, worth about HK$16m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Wai Chun Bio-Technology Insider Transactions Indicate?

Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Wai Chun Bio-Technology insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Wai Chun Bio-Technology. Every company has risks, and we've spotted 4 warning signs for Wai Chun Bio-Technology (of which 1 makes us a bit uncomfortable!) you should know about.

Of course Wai Chun Bio-Technology 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.