Don't Ignore The Insider Selling In Kintor Pharmaceutical

Some Kintor Pharmaceutical Limited (HKG:9939) shareholders may be a little concerned to see that insider Chuangxing Guo recently sold a substantial HK$42m worth of stock at a price of HK$3.79 per share. That sale reduced their total holding by 37% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Kintor Pharmaceutical

The Last 12 Months Of Insider Transactions At Kintor Pharmaceutical

In the last twelve months, the biggest single purchase by an insider was when Founder Youzhi Tong bought HK$518m worth of shares at a price of HK$12.94 per share. That means that an insider was happy to buy shares at above the current price of HK$3.22. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Youzhi Tong was the only individual insider to buy during the last year.

Youzhi Tong bought 59.91m shares over the last 12 months at an average price of HK$13.27. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Kintor Pharmaceutical is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Kintor Pharmaceutical Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 16% of Kintor Pharmaceutical shares, worth about HK$226m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Kintor Pharmaceutical Insider Transactions Indicate?

An insider sold Kintor Pharmaceutical shares recently, but they didn't buy any. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 4 warning signs for Kintor Pharmaceutical (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

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, but not derivative transactions.

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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.