With Clover Biopharmaceuticals Up 10%, Insider Buyers Count Their Returns
Insiders who bought Clover Biopharmaceuticals, Ltd. (HKG:2197) stock in the last 12 months were richly rewarded last week. The company's market value increased by HK$195m as a result of the stock's 10% gain over the same period. In other words, the original CN¥686.7k purchase is now worth CN¥809.3k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Clover Biopharmaceuticals
The Founder Peng Liang made the biggest insider purchase in the last 12 months. That single transaction was for HK$545k worth of shares at a price of HK$2.48 each. That means that even when the share price was higher than HK$1.63 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Peng Liang was the only individual insider to buy during the last year.
Peng Liang bought 496.50k shares over the last 12 months at an average price of HK$1.38. 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!
View our latest analysis for Clover Biopharmaceuticals
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
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. We usually like to see fairly high levels of insider ownership. It appears that Clover Biopharmaceuticals insiders own 21% of the company, worth about HK$437m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Clover Biopharmaceuticals Insiders?
It doesn't really mean much that no insider has traded Clover Biopharmaceuticals shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Clover Biopharmaceuticals insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Clover Biopharmaceuticals you should be aware of, and 2 of these are significant.
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.
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.