Even if it's not a huge purchase, we think it was good to see that Kei Li, the Co-Founder & Chairman of Dawnrays Pharmaceutical (Holdings) Limited (HKG:2348) recently shelled out CN¥320k to buy stock, at CN¥1.42 per share. However, we do note that it only increased their holding by 0.2%, and it wasn't a huge purchase by absolute value, either.
The Last 12 Months Of Insider Transactions At Dawnrays Pharmaceutical (Holdings)
Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Shaojun Chen for HK$2.2m worth of shares, at about HK$1.46 per share. That implies that an insider found the current price of HK$1.46 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Dawnrays Pharmaceutical (Holdings) insiders decided to buy shares at close to current prices.
While Dawnrays Pharmaceutical (Holdings) insiders bought shares last year, they didn't sell. You can see a visual depiction of insider transactions (by 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!
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).
Insider Ownership of Dawnrays Pharmaceutical (Holdings)
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Dawnrays Pharmaceutical (Holdings) insiders own 13% of the company, worth about HK$289m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Dawnrays Pharmaceutical (Holdings) Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Dawnrays Pharmaceutical (Holdings) insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! Along with insider transactions, I recommend checking if Dawnrays Pharmaceutical (Holdings) is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Dawnrays Pharmaceutical (Holdings) 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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at email@example.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.