Lepu Biopharma Co., Ltd.'s (HKG:2157) stock price has dropped 31% in the previous week, but insiders who sold CN¥18m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of CN¥4.53 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lepu Biopharma

Lepu Biopharma Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Rongyu Su, for HK$18m worth of shares, at about HK$4.53 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$2.68). So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Rongyu Su.

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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 Lepu Biopharma insiders own 37% of the company, worth about HK$1.7b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Lepu Biopharma Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Lepu Biopharma shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Lepu Biopharma insiders selling. While we like knowing 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. You'd be interested to know, that we found 2 warning signs for Lepu Biopharma and we suggest you have a look.

Of course Lepu Biopharma 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.