Insiders Buying CStone Pharmaceuticals Might Wish They Invested More, Stock Gains 14%

CStone Pharmaceuticals (HKG:2616) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 14%, resulting in a HK$319m rise in the company's market capitalisation, translating to a gain of 35% on their initial investment. As a result, the stock they originally bought for CN¥2.00m is now worth CN¥2.71m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for CStone Pharmaceuticals

CStone Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO, President of R&D and Executive Director Jianxin Yang bought HK$1.5m worth of shares at a price of HK$1.72 per share. We do like to see buying, but this purchase was made at well below the current price of HK$2.03. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Jianxin Yang bought 1.34m shares over the last 12 months at an average price of HK$1.50. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

CStone Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of CStone Pharmaceuticals

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. Insiders own 1.9% of CStone Pharmaceuticals shares, worth about HK$48m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At CStone Pharmaceuticals Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of CStone Pharmaceuticals we think they are probably pretty confident of a bright future. 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. In terms of investment risks, we've identified 1 warning sign with CStone Pharmaceuticals and understanding this should be part of your investment process.

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.