Stock Analysis

Have Insiders Been Buying China Maple Leaf Educational Systems Limited (HKG:1317) Shares?

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SEHK:1317
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in China Maple Leaf Educational Systems Limited (HKG:1317).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

Check out our latest analysis for China Maple Leaf Educational Systems

China Maple Leaf Educational Systems Insider Transactions Over The Last Year

Founder Shu Liang Jen made the biggest insider purchase in the last 12 months. That single transaction was for HK$19m worth of shares at a price of HK$3.78 each. That means that even when the share price was higher than HK$2.53 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. We note that Shu Liang Jen was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 36114000 shares for HK$116m. On the other hand they divested 406000 shares, for HK$1.2m. Overall, China Maple Leaf Educational Systems insiders were net buyers last year. They paid about HK$3.20 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by 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!

China Maple Leaf Educational Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

SEHK:1317 Recent Insider Trading, September 22nd 2019
SEHK:1317 Recent Insider Trading, September 22nd 2019

Insiders at China Maple Leaf Educational Systems Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at China Maple Leaf Educational Systems. In fact, two insiders bought CN¥28m worth of shares. On the other hand, Founder Shu Liang Jen netted CN¥1.2m by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that China Maple Leaf Educational Systems insiders own 52% of the company, worth about HK$3.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About China Maple Leaf Educational Systems Insiders?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Maple Leaf Educational Systems. One for the watchlist, at least! Of course, the future is what matters most. So if you are interested in China Maple Leaf Educational Systems, you should check out this free report on analyst forecasts for the company.

But note: China Maple Leaf Educational Systems 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, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

About SEHK:1317

China Maple Leaf Educational Systems

China Maple Leaf Educational Systems Limited, together with its subsidiaries, operates bilingual private schools and preschools in the People’s Republic of China and Southeast Asia.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth0
Past Performance0
Financial Health1
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Good value with worrying balance sheet.