While S-Enjoy Service Group Co., Limited (HKG:1755) shareholders have enjoyed a good week with stock up 23%, they need remain vigilant. In spite of the relatively cheap prices, insiders made the decision to sell CN¥588k worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.
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.
S-Enjoy Service Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chief Operating Officer, Xinli Gao, for HK$444k worth of shares, at about HK$6.09 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$3.15. So it may not shed much light on insider confidence at current levels.
All up, insiders sold more shares in S-Enjoy Service Group than they bought, over the last year. 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!
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Insider Ownership Of S-Enjoy Service Group
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. A high insider ownership often makes company leadership more mindful of shareholder interests. S-Enjoy Service Group insiders own 69% of the company, currently worth about HK$1.9b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About S-Enjoy Service Group Insiders?
The fact that there have been no S-Enjoy Service Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of S-Enjoy Service Group, we can't say the same about the selling of shares. 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 S-Enjoy Service Group is showing 2 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.