An Insider At 3SBio Lowered Their Holding Recently

Viewing insider transactions for 3SBio Inc.'s (HKG:1530 ) over the last year, we see that insiders were net sellers. This means that a larger number of shares were sold by insiders in relation to shares purchased.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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3SBio Insider Transactions Over The Last Year

The Non-Executive Director, Jiaoe Zhang, made the biggest insider sale in the last 12 months. That single transaction was for HK$5.7m worth of shares at a price of HK$12.42 each. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$23.30. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 3.6% of Jiaoe Zhang's holding. Jiaoe Zhang was the only individual insider to sell over the last year.

Jiaoe Zhang divested 605.50k shares over the last 12 months at an average price of CN¥12.62. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for 3SBio

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does 3SBio 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that 3SBio insiders own 5.8% of the company, worth about HK$3.4b. 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 3SBio Insiders?

It doesn't really mean much that no insider has traded 3SBio shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of 3SBio 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. In terms of investment risks, we've identified 1 warning sign with 3SBio and understanding this should be part of your investment process.

Of course 3SBio 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 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.