Have Insiders Been Selling Venus Medtech (Hangzhou) Inc. (HKG:2500) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Venus Medtech (Hangzhou) Inc. (HKG:2500), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Venus Medtech (Hangzhou)

Venus Medtech (Hangzhou) Insider Transactions Over The Last Year

Notably, that recent sale by Hou-Sen Lim is the biggest insider sale of Venus Medtech (Hangzhou) shares that we've seen in the last year. That means that an insider was selling shares at around the current price of HK$81.60. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Hou-Sen Lim ditched 2.55m shares over the year. The average price per share was CN¥82.79. 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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Venus Medtech (Hangzhou) Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Venus Medtech (Hangzhou) shares. In total, COO, CTO & Executive Director Hou-Sen Lim dumped HK$211m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Venus Medtech (Hangzhou) insiders own 27% of the company, currently worth about HK$9.0b 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.

What Might The Insider Transactions At Venus Medtech (Hangzhou) Tell Us?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. Case in point: We've spotted 2 warning signs for Venus Medtech (Hangzhou) you should be aware of.

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, but not derivative transactions.

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