Despite a 11% gain in MicroPort Scientific Corporation's (HKG:853) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of US$2.1m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
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.
MicroPort Scientific Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Non-Executive Director, Jonathan H. Chou, for HK$2.1m worth of shares, at about HK$14.01 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of HK$5.90. So it is hard to draw any strong conclusion from it. Jonathan H. Chou was the only individual insider to sell shares in the last twelve months.
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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, MicroPort Scientific insiders have about 0.4% of the stock, worth approximately HK$38m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.
So What Does This Data Suggest About MicroPort Scientific Insiders?
It doesn't really mean much that no insider has traded MicroPort Scientific shares in the last quarter. We don't take much encouragement from the transactions by MicroPort Scientific insiders. The modest level of insider ownership is, at least, some comfort. 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. In terms of investment risks, we've identified 2 warning signs with MicroPort Scientific and understanding them should be part of your investment process.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.