Insiders Sold CN¥4.2m Of TYK Medicines Stock Possibly Sending Warning Sign

Even though TYK Medicines, Inc (HKG:2410) stock gained 13% last week, insiders who sold CN¥4.2m worth of stock over the past year are probably better off. Selling at an average price of CN¥17.49, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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TYK Medicines Insider Transactions Over The Last Year

The Non-Executive Director, Eric Gu, made the biggest insider sale in the last 12 months. That single transaction was for HK$2.7m worth of shares at a price of HK$19.05 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (HK$14.57). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Eric Gu.

Eric Gu divested 240.00k shares over the last 12 months at an average price of CN¥17.49. 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!

See our latest analysis for TYK Medicines

I will like TYK Medicines better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.1% of TYK Medicines shares, worth about HK$117m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The TYK Medicines Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of TYK Medicines insider transactions don't fill us with confidence. 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. To that end, you should learn about the 2 warning signs we've spotted with TYK Medicines (including 1 which shouldn't be ignored).

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.