Reversal Of Fortune For Cryofocus Medtech (Shanghai) Insiders Who Made A CN¥87.4m Purchase

Some of the losses seen by insiders who purchased CN¥87.4m worth of Cryofocus Medtech (Shanghai) Co., Ltd. (HKG:6922) shares over the past year were recovered after the stock increased by 15% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CN¥47m since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Cryofocus Medtech (Shanghai)

The Last 12 Months Of Insider Transactions At Cryofocus Medtech (Shanghai)

The insider Jianhui Wu made the biggest insider purchase in the last 12 months. That single transaction was for HK$43m worth of shares at a price of HK$17.00 each. That means that even when the share price was higher than HK$7.91 (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. To us, it's very important to consider the price insiders pay for 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. Jianhui Wu was the only individual insider to buy shares in the last twelve months.

Jianhui Wu purchased 5.12m shares over the year. The average price per share was HK$17.08. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Cryofocus Medtech (Shanghai) is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Cryofocus Medtech (Shanghai) Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Cryofocus Medtech (Shanghai) insiders own about HK$310m worth of shares. That equates to 16% of the company. 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 Do The Cryofocus Medtech (Shanghai) Insider Transactions Indicate?

The fact that there have been no Cryofocus Medtech (Shanghai) insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Cryofocus Medtech (Shanghai) insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Cryofocus Medtech (Shanghai) has 3 warning signs and it would be unwise to ignore them.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com