Insiders Could Have Profited By Holding onto TYK Medicines Shares Despite 12% Drop

TYK Medicines, Inc's (HKG:2410) value has fallen 12% in the last week, but insiders who sold CN¥4.2m worth of stock over the last year have had less success. Given that the average selling price of CN¥17.49 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

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The Last 12 Months Of Insider Transactions At TYK Medicines

The Non-Executive Director, Hong 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. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of HK$8.42. So it is hard to draw any strong conclusion from it. Hong Gu was the only individual insider to sell shares in the last twelve months.

Hong Gu ditched 240.00k shares over the year. The average price per share was CN¥17.49. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for TYK Medicines

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Does TYK Medicines Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From our data, it seems that TYK Medicines insiders own 2.1% of the company, worth about HK$67m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At TYK Medicines Tell Us?

It doesn't really mean much that no insider has traded TYK Medicines shares in the last quarter. Still, the insider transactions at TYK Medicines in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with TYK Medicines and understanding these should be part of your investment process.

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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.