Insider Purchases Worth CN¥5.34m See Losses As Shanghai Bao Pharmaceuticals Market Value Drops To HK$5.6b
Insiders who acquired CN¥5.34m worth of Shanghai Bao Pharmaceuticals Co., Ltd.'s (HKG:2659) stock at an average price of CN¥21.36 in the past 12 months may be dismayed by the recent 13% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CN¥4.33m, which is not great.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Shanghai Bao Pharmaceuticals
In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Executive Chairman Liu Yanjun bought HK$3.6m worth of shares at a price of HK$24.33 per share. That means that an insider was happy to buy shares at above the current price of HK$17.33. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Liu Yanjun was the only individual insider to buy shares in the last twelve months.
Liu Yanjun purchased 250.00k shares over the year. The average price per share was HK$21.36. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for Shanghai Bao Pharmaceuticals
Shanghai Bao Pharmaceuticals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Shanghai Bao Pharmaceuticals
For a common shareholder, it is worth checking how many shares are held by company 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. Shanghai Bao Pharmaceuticals insiders own about HK$2.1b worth of shares (which is 37% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Shanghai Bao Pharmaceuticals Tell Us?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Shanghai Bao Pharmaceuticals insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. While conducting our analysis, we found that Shanghai Bao Pharmaceuticals has 1 warning sign and it would be unwise to ignore it.
Of course Shanghai Bao Pharmaceuticals 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.