Insiders who placed huge bets on China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC) earlier this year would be disappointed with the 12% drop
The recent price decline of 12% in China SXT Pharmaceuticals, Inc.'s (NASDAQ:SXTC) stock may have disappointed insiders who bought US$2.2m worth of shares at an average price of US$1.35 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$455k, which is not great.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for China SXT Pharmaceuticals
The Last 12 Months Of Insider Transactions At China SXT Pharmaceuticals
Over the last year, we can see that the biggest insider purchase was by insider Xiao Zhijun for US$2.2m worth of shares, at about US$1.35 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.28). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Xiao Zhijun.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does China SXT Pharmaceuticals Boast High 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. Insiders own 23% of China SXT Pharmaceuticals shares, worth about US$598k. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About China SXT Pharmaceuticals Insiders?
The fact that there have been no China SXT Pharmaceuticals insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in China SXT Pharmaceuticals and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 5 warning signs for China SXT Pharmaceuticals (3 are concerning) you should be aware of.
But note: China SXT Pharmaceuticals 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.
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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.
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