We'd be surprised if Shanghai Gench Education Group Limited (HKG:1525) shareholders haven't noticed that the Executive Chairman, Xingzeng Zhou, recently sold HK$871k worth of stock at HK$3.83 per share. On the bright side, that sale was only 0.8% of their holding, so we doubt it's very meaningful, on its own.
View our latest analysis for Shanghai Gench Education Group
The Last 12 Months Of Insider Transactions At Shanghai Gench Education Group
Notably, that recent sale by Executive Chairman Xingzeng Zhou was not the only time they sold Shanghai Gench Education Group shares this year. Earlier in the year, they fetched HK$3.44 per share in a -HK$11m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$3.72. 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 9.7%of Xingzeng Zhou's holding.
Xingzeng Zhou divested 5.69m shares over the last 12 months at an average price of CN¥3.68. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Does Shanghai Gench Education Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Shanghai Gench Education Group insiders own 42% of the company, currently worth about HK$643m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Shanghai Gench Education Group Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Shanghai Gench Education Group is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for Shanghai Gench Education Group you should know about.
But note: Shanghai Gench Education Group 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.
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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.