Investors who take an interest in Fusen Pharmaceutical Company Limited (HKG:1652) should definitely note that the CEO & Executive Director, Zhiming Cao, recently paid HK$0.96 per share to buy HK$1.9m worth of the stock. Although the purchase only increased their holding by 1.5%, it is still a solid purchase in our view.

See our latest analysis for Fusen Pharmaceutical

Fusen Pharmaceutical Insider Transactions Over The Last Year

Notably, that recent purchase by CEO & Executive Director Zhiming Cao was not the only time they bought Fusen Pharmaceutical shares this year. They previously made an even bigger purchase of HK$2.1m worth of shares at a price of HK$1.66 per share. That means that even when the share price was higher than HK$0.97 (the recent price), an insider wanted to purchase shares. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Zhiming Cao was the only individual insider to buy during the last year.

Zhiming Cao purchased 12.44m shares over the year. The average price per share was HK$1.11. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Fusen Pharmaceutical is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership Of Fusen Pharmaceutical

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Fusen Pharmaceutical insiders own about HK$347m worth of shares (which is 47% of the company). 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 Does This Data Suggest About Fusen Pharmaceutical Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Fusen Pharmaceutical. That's what I like to see! 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. At Simply Wall St, we've found that Fusen Pharmaceutical has 2 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.

But note: Fusen Pharmaceutical 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.