Despite a 14% gain in Peijia Medical Limited's (HKG:9996) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell CN¥11m worth of stock in the past 12 months. This could be a sign of impending weakness.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Peijia Medical
Peijia Medical Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive Director & Company Secretary, Hong Ye, sold HK$3.1m worth of shares at a price of HK$11.09 per share. 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 HK$7.95. So it may not tell us anything about how insiders feel about the current share price. Hong Ye was the only individual insider to sell over the last year.
Hong Ye divested 1.04m shares over the last 12 months at an average price of CN¥10.71. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Peijia Medical better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Peijia Medical Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Peijia Medical insiders own about HK$164m worth of shares. That equates to 3.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Peijia Medical Insiders?
It doesn't really mean much that no insider has traded Peijia Medical shares in the last quarter. While we feel good about high insider ownership of Peijia Medical, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Peijia Medical. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Peijia Medical.
Of course Peijia Medical 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.
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.