Insider Stock Buying Reaches CN¥264.4m On Shanghai INT Medical Instruments

Quite a few insiders have dramatically grown their holdings in Shanghai INT Medical Instruments Co., Ltd. (HKG:1501) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

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 Shanghai INT Medical Instruments

In the last twelve months, the biggest single purchase by an insider was when insider Yang Hua bought HK$200m worth of shares at a price of HK$26.00 per share. We do like to see buying, but this purchase was made at well below the current price of HK$33.38. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Shanghai INT Medical Instruments insiders bought shares during the last year, they didn't sell. 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!

View our latest analysis for Shanghai INT Medical Instruments

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Shanghai INT Medical Instruments insiders own about HK$1.4b worth of shares (which is 20% of the company). 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 Shanghai INT Medical Instruments Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Shanghai INT Medical Instruments insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Shanghai INT Medical Instruments has 1 warning sign and it would be unwise to ignore this.

Of course Shanghai INT Medical Instruments 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.