We wouldn't blame WuXi Biologics (Cayman) Inc. (HKG:2269) shareholders if they were a little worried about the fact that Zhisheng Chen, the CEO & Executive Director recently netted about HK$4.4m selling shares at an average price of HK$14.70. However, that sale only accounted for 2.1% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for WuXi Biologics (Cayman)

The Last 12 Months Of Insider Transactions At WuXi Biologics (Cayman)

Notably, that recent sale by CEO & Executive Director Zhisheng Chen was not the only time they sold WuXi Biologics (Cayman) shares this year. They previously made an even bigger sale of -HK$6.6m worth of shares at a price of HK$11.45 per share. That means that an insider was selling shares at slightly below the current price (HK$14.66). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 4.0% of Zhisheng Chen's holding.

In the last twelve months insiders purchased 125.70k shares for HK$3.8m. On the other hand they divested 1.06m shares, for HK$13m. All up, insiders sold more shares in WuXi Biologics (Cayman) 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like WuXi Biologics (Cayman) better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that WuXi Biologics (Cayman) insiders own 0.4% of the company, worth about HK$224m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At WuXi Biologics (Cayman) Tell Us?

Insiders sold WuXi Biologics (Cayman) shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 WuXi Biologics (Cayman) and understanding them should be part of your investment process.

But note: WuXi Biologics (Cayman) may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.