Don't Ignore The Insider Selling In Shanghai Gench Education Group

Investors may wish to note that an insider of Shanghai Gench Education Group Limited, Xiangzhan Zheng, recently netted HK$540k from selling stock, receiving an average price of HK$2.70. On the bright side, that's just a small sale and only reduced their holding by 0.8%.

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The Last 12 Months Of Insider Transactions At Shanghai Gench Education Group

In fact, the recent sale by Xiangzhan Zheng was the biggest sale of Shanghai Gench Education Group shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of HK$2.81, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 0.8% of Xiangzhan Zheng's holding.

Xiangzhan Zheng ditched 325.00k shares over the year. The average price per share was CN¥2.78. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Shanghai Gench Education Group

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Does Shanghai Gench Education Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Shanghai Gench Education Group insiders own about HK$382m worth of shares. That equates to 34% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Shanghai Gench Education Group Insiders?

An insider sold Shanghai Gench Education Group shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. 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 1 warning sign for Shanghai Gench Education Group you should know about.

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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.