Have Insiders Sold Sino Biopharmaceutical Shares Recently?

We wouldn't blame Sino Biopharmaceutical Limited (HKG:1177) shareholders if they were a little worried about the fact that Ping Tse, the Founder & Senior Executive Vice Chairman recently netted about HK$51m selling shares at an average price of HK$3.72. However, that sale only accounted for 0.8% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Sino Biopharmaceutical

Sino Biopharmaceutical Insider Transactions Over The Last Year

Notably, that recent sale by Ping Tse is the biggest insider sale of Sino Biopharmaceutical shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (HK$4.13). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 0.8% of Ping Tse's holding.

Happily, we note that in the last year insiders paid HK$23m for 9.50m shares. On the other hand they divested 13.80m shares, for HK$51m. 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 Sino Biopharmaceutical 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.

Insider Ownership Of Sino Biopharmaceutical

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Sino Biopharmaceutical insiders own about HK$37b worth of shares (which is 50% of the company). 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 Sino Biopharmaceutical Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Sino Biopharmaceutical makes money, and is growing profits. 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 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 Sino Biopharmaceutical you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.