Insider Buyers Lose Additional CN¥1.4m As Clover Biopharmaceuticals Dips To HK$370m

Insiders who bought CN¥1.77m worth of Clover Biopharmaceuticals, Ltd.'s (HKG:2197) stock at an average buy price of CN¥1.16 over the last year may be disappointed by the recent 10% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥402.5k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Clover Biopharmaceuticals

Clover Biopharmaceuticals Insider Transactions Over The Last Year

The Founder Peng Liang made the biggest insider purchase in the last 12 months. That single transaction was for HK$1.2m worth of shares at a price of HK$1.15 each. That means that an insider was happy to buy shares at above the current price of HK$0.27. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Clover Biopharmaceuticals insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Clover Biopharmaceuticals 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.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Clover Biopharmaceuticals insiders own about HK$74m worth of shares. That equates to 20% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Clover Biopharmaceuticals Tell Us?

It doesn't really mean much that no insider has traded Clover Biopharmaceuticals shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Clover Biopharmaceuticals insiders are doubting the company, and they do own shares. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Clover Biopharmaceuticals.

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.

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