Selling Hydration Pharmaceuticals Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Despite the fact that The Hydration Pharmaceuticals Company Limited's (ASX:HPC) value has dropped 17% in the last week insiders who sold US$205m worth of stock in the past 12 months have had less success. The average selling price of US$47.73 is still lower than the current share price, or in other words, insiders would have been better off holding on to 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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Hydration Pharmaceuticals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, David Hemming, for AU$205m worth of shares, at about AU$0.013 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of AU$0.005. So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 44.75m shares for AU$450k. But they sold 4.30m shares for AU$205m. In total, Hydration Pharmaceuticals insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Hydration Pharmaceuticals

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Hydration Pharmaceuticals Insiders Are Selling The Stock

The last three months saw significant insider selling at Hydration Pharmaceuticals. In total, insiders dumped AU$205m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Hydration Pharmaceuticals 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 20% of Hydration Pharmaceuticals shares, worth about AU$424k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Hydration Pharmaceuticals Tell Us?

Insiders haven't bought Hydration Pharmaceuticals stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Hydration Pharmaceuticals. When we did our research, we found 5 warning signs for Hydration Pharmaceuticals (4 can't be ignored!) that we believe deserve your full attention.

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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.