Are Insiders Buying Sihuan Pharmaceutical Holdings Group Ltd. (HKG:460) Stock?
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Sihuan Pharmaceutical Holdings Group Ltd. (HKG:460).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for Sihuan Pharmaceutical Holdings Group
The Last 12 Months Of Insider Transactions At Sihuan Pharmaceutical Holdings Group
Over the last year, we can see that the biggest insider purchase was by Co-Founder & Executive Chairman Fengsheng Che for HK$13m worth of shares, at about HK$1.50 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$2.00), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Fengsheng Che bought 23.5m shares over the last 12 months at an average price of HK$1.50. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Sihuan Pharmaceutical Holdings Group insiders own 12% of the company, worth about HK$2.4b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Sihuan Pharmaceutical Holdings Group Insiders?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Sihuan Pharmaceutical Holdings Group. Nice! Of course, the future is what matters most. So if you are interested in Sihuan Pharmaceutical Holdings Group, you should check out this free report on analyst forecasts for the company.
But note: Sihuan Pharmaceutical Holdings Group 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
