Insiders' CN¥12.4m Investments In Red Following Jiangsu Recbio Technology's HK$341m Dip In Market Value

Insiders who acquired CN¥12.4m worth of Jiangsu Recbio Technology Co., Ltd.'s (HKG:2179) stock at an average price of CN¥7.86 in the past 12 months may be dismayed by the recent 13% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CN¥7.51m.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Jiangsu Recbio Technology Insider Transactions Over The Last Year

The insider Haoyu Xu made the biggest insider purchase in the last 12 months. That single transaction was for HK$12m worth of shares at a price of HK$7.86 each. That means that even when the share price was higher than HK$4.76 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Haoyu Xu was the only individual insider to buy during the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Jiangsu Recbio Technology

Jiangsu Recbio Technology is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 3.9% of Jiangsu Recbio Technology shares, worth about HK$88m. 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 Do The Jiangsu Recbio Technology Insider Transactions Indicate?

The fact that there have been no Jiangsu Recbio Technology insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Jiangsu Recbio Technology and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Jiangsu Recbio Technology. Every company has risks, and we've spotted 3 warning signs for Jiangsu Recbio Technology (of which 2 are concerning!) you should know about.

But note: Jiangsu Recbio Technology 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 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.