Selling WuXi Biologics (Cayman) Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Even though WuXi Biologics (Cayman) Inc. (HKG:2269) has fallen by 24% over the past week , insiders who sold CN¥117m worth of stock over the past year have had less luck. The average selling price of CN¥41.14 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for WuXi Biologics (Cayman)

The Last 12 Months Of Insider Transactions At WuXi Biologics (Cayman)

In the last twelve months, the biggest single sale by an insider was when the Honorary President of Global Biologics Development, Weichang Zhou, sold HK$76m worth of shares at a price of HK$50.85 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$17.32). So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid HK$3.8m for 125.70k shares. But they sold 2.83m shares for HK$117m. All up, insiders sold more shares in WuXi Biologics (Cayman) than they bought, over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. WuXi Biologics (Cayman) insiders own about HK$260m worth of shares. That equates to 0.4% 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.

So What Do The WuXi Biologics (Cayman) Insider Transactions Indicate?

It doesn't really mean much that no insider has traded WuXi Biologics (Cayman) shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the WuXi Biologics (Cayman) insiders selling. 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. Every company has risks, and we've spotted 1 warning sign for WuXi Biologics (Cayman) you should know about.

Of course WuXi Biologics (Cayman) may not be the best stock to buy. So you may wish to see this free collection of high quality 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.