WuXi Biologics (Cayman) Insiders Sold CN¥182m Of Shares Suggesting Hesitancy

Many WuXi Biologics (Cayman) Inc. (HKG:2269) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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WuXi Biologics (Cayman) Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Zhisheng Chen, for HK$117m worth of shares, at about HK$22.57 per share. That means that even when the share price was below the current price of HK$23.85, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 27% of Zhisheng Chen's holding. Notably Zhisheng Chen was also the biggest buyer, having purchased HK$6.0m worth of shares.

All up, insiders sold more shares in WuXi Biologics (Cayman) than they bought, over the last year. 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!

See our latest analysis for WuXi Biologics (Cayman)

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WuXi Biologics (Cayman) Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at WuXi Biologics (Cayman). In total, insiders sold HK$168m worth of shares in that time. On the flip side, CEO & Executive Director Zhisheng Chen spent HK$6.0m on purchasing shares (as mentioned above) . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. WuXi Biologics (Cayman) insiders own about HK$400m 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.

What Might The Insider Transactions At WuXi Biologics (Cayman) Tell Us?

Unfortunately, there has been more insider selling of WuXi Biologics (Cayman) stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, WuXi Biologics (Cayman) makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing WuXi Biologics (Cayman). At Simply Wall St, we found 2 warning signs for WuXi Biologics (Cayman) that deserve your attention before buying any shares.

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.