Bullish Ascletis Pharma Insiders Rewarded As Their Investment Rises To CN¥37.4m

Last week, Ascletis Pharma Inc. (HKG:1672) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 19% last week, resulting in a HK$552m increase in the company's market worth, implying a 130% gain on their initial purchase. As a result, the stock they originally bought for CN¥16.2m is now worth CN¥37.4m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Ascletis Pharma

The Last 12 Months Of Insider Transactions At Ascletis Pharma

In fact, the recent purchase by Founder Jinzi Jason Wu was not their only acquisition of Ascletis Pharma shares this year. Earlier in the year, they paid HK$1.44 per share in a HK$8.7m purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$3.63. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Jinzi Jason Wu bought a total of 10.32m shares over the year at an average price of HK$1.57. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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 Of Ascletis Pharma

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. It's great to see that Ascletis Pharma insiders own 64% of the company, worth about HK$2.3b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Ascletis Pharma Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Ascletis Pharma. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Ascletis Pharma is showing 4 warning signs in our investment analysis, and 1 of those can't be ignored...

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.

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.