Shareholders Can't Ignore CN¥5.7m Of Sales By Venus Medtech (Hangzhou) Insiders

While Venus Medtech (Hangzhou) Inc. (HKG:2500) shareholders have had a good week with the stock up 13%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell CN¥5.7m 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.

Check out our latest analysis for Venus Medtech (Hangzhou)

The Last 12 Months Of Insider Transactions At Venus Medtech (Hangzhou)

In the last twelve months, the biggest single sale by an insider was when the insider, Wing Yu Leung, sold HK$5.7m worth of shares at a price of HK$14.87 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$4.35. So it may not shed much light on insider confidence at current levels. Wing Yu Leung was the only individual insider to sell shares in the last twelve months.

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!

I will like Venus Medtech (Hangzhou) better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Venus Medtech (Hangzhou) Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 19% of Venus Medtech (Hangzhou) shares, worth about HK$371m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Venus Medtech (Hangzhou) Insiders?

It doesn't really mean much that no insider has traded Venus Medtech (Hangzhou) shares in the last quarter. While we feel good about high insider ownership of Venus Medtech (Hangzhou), we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Venus Medtech (Hangzhou) you should know about.

But note: Venus Medtech (Hangzhou) may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.