How Much Are Leader Education Limited (HKG:1449) Insiders Taking Off The Table?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Leader Education Limited (HKG:1449), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

See our latest analysis for Leader Education

Leader Education Insider Transactions Over The Last Year

The Chief Executive Officer & Chairman, Laixiang Liu, made the biggest insider sale in the last 12 months. That single transaction was for HK$19m worth of shares at a price of HK$2.10 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (HK$0.89). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Laixiang Liu. Notably Laixiang Liu was also the biggest buyer, having purchased HK$6.6m worth of shares.

Happily, we note that in the last year insiders paid HK$6.6m for 5.68m shares. But insiders sold 9.00m shares worth HK$19m. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Leader Education

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Leader Education insiders own about HK$442m worth of shares (which is 75% 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 Leader Education Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Leader Education shares in the last quarter. While we feel good about high insider ownership of Leader Education, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Leader Education. At Simply Wall St, we've found that Leader Education has 4 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

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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. 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.
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