Possible bearish signals as BeiGene, Ltd. (NASDAQ:BGNE) insiders disposed of US$6.6m worth of stock

By
Simply Wall St
Published
April 11, 2022
NasdaqGS:BGNE
Source: Shutterstock

Over the past year, many BeiGene, Ltd. (NASDAQ:BGNE) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. 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 do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for BeiGene

BeiGene Insider Transactions Over The Last Year

The President, Xiaobin Wu, made the biggest insider sale in the last 12 months. That single transaction was for US$2.3m worth of shares at a price of US$343 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$197. So it may not tell us anything about how insiders feel about the current share price.

Insiders in BeiGene didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqGS:BGNE Insider Trading Volume April 11th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does BeiGene 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. We usually like to see fairly high levels of insider ownership. BeiGene insiders own about US$1.0b worth of shares (which is 5.1% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At BeiGene Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the BeiGene insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for BeiGene you should be aware of.

But note: BeiGene may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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