Have Shanghai Gench Education Group Insiders Been Selling Stock?

Some Shanghai Gench Education Group Limited (HKG:1525) shareholders may be a little concerned to see that the Executive Chairman, Xingzeng Zhou, recently sold a substantial HK$17m worth of stock at a price of HK$3.90 per share. That sale reduced their total holding by 14% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Shanghai Gench Education Group

Shanghai Gench Education Group Insider Transactions Over The Last Year

Notably, that recent sale by Xingzeng Zhou is the biggest insider sale of Shanghai Gench Education Group shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of HK$3.85. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Xingzeng Zhou divested 10.01m shares over the last 12 months at an average price of CN¥3.78. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Shanghai Gench Education Group

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. Shanghai Gench Education Group insiders own about HK$665m worth of shares (which is 44% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Shanghai Gench Education Group Tell Us?

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. But since Shanghai Gench Education Group is profitable and growing, we're not too worried by this. 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 these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Shanghai Gench Education Group that deserve your attention before buying any shares.

But note: Shanghai Gench Education Group 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 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.