Selling CN¥67m Of RemeGen Stock Rewarded Insiders

While it’s been a great week for RemeGen Co., Ltd. (HKG:9995) shareholders after stock gained 23%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell CN¥67m worth of stock in the past 12 months. This could be a sign of impending weakness.

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

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The Last 12 Months Of Insider Transactions At RemeGen

The Co-Founder & Executive Chairman, Weidong Wang, made the biggest insider sale in the last 12 months. That single transaction was for HK$16m worth of shares at a price of HK$87.28 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$125. 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. We note that the biggest single sale was only 6.3% of Weidong Wang's holding. The only individual insider seller over the last year was Weidong Wang.

Weidong Wang divested 1.01m shares over the last 12 months at an average price of CN¥65.91. 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!

See our latest analysis for RemeGen

I will like RemeGen better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At RemeGen Have Sold Stock Recently

The last three months saw significant insider selling at RemeGen. In total, Co-Founder & Executive Chairman Weidong Wang dumped HK$31m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does RemeGen Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that RemeGen insiders own 12% of the company, worth about HK$8.7b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About RemeGen Insiders?

An insider sold RemeGen shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of RemeGen.

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.