Insiders in China Maple Leaf Educational Systems Limited (HKG:1317) are down 45% on their CN¥8.9m purchase despite recent gains

By
Simply Wall St
Published
March 23, 2022
SEHK:1317
Source: Shutterstock

Insiders who bought CN¥8.9m worth of China Maple Leaf Educational Systems Limited (HKG:1317) stock in the last year have seen some of their losses recouped as the stock gained 31% last week. However, total losses seen by insiders are still CN¥4.0m but in since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for China Maple Leaf Educational Systems

China Maple Leaf Educational Systems Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Founder Shu Liang Jen for HK$3.2m worth of shares, at about HK$1.60 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.44). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Shu Liang Jen was the only individual insider to buy shares in the last twelve months.

Shu Liang Jen bought a total of 11.13m shares over the year at an average price of HK$0.80. 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!

insider-trading-volume
SEHK:1317 Insider Trading Volume March 23rd 2022

China Maple Leaf Educational Systems is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does China Maple Leaf Educational Systems Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. China Maple Leaf Educational Systems insiders own about HK$671m worth of shares (which is 51% of the company). 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 Do The China Maple Leaf Educational Systems Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China Maple Leaf Educational Systems. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Maple Leaf Educational Systems. At Simply Wall St, we've found that China Maple Leaf Educational Systems has 3 warning signs (2 are a bit concerning!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

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