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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Consun Pharmaceutical Group Limited (HKG:1681).

What Is Insider Selling?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

Check out our latest analysis for Consun Pharmaceutical Group

The Last 12 Months Of Insider Transactions At Consun Pharmaceutical Group

In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Yubao An bought HK$12m worth of shares at a price of HK$7.44 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices.

Happily, we note that in the last year insiders bought 2.07m shares for a total of HK$15m. Overall, Consun Pharmaceutical Group insiders were net buyers last year. They paid about HK$7.46 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is HK$5.93. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Consun Pharmaceutical Group insiders own about HK$2.7b worth of shares (which is 53% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Consun Pharmaceutical Group Insider Transactions Indicate?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Consun Pharmaceutical Group insiders feel good about the company’s future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.