Insiders In China New Higher Education Group Still Down 10% On CN¥17.5m Investment

Some of the losses seen by insiders who purchased CN¥17.5m worth of China New Higher Education Group Limited (HKG:2001) shares over the past year were recovered after the stock increased by 13% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CN¥1.8m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At China New Higher Education Group

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board Xiaoxuan Li bought HK$2.9m worth of shares at a price of HK$1.16 per share. That means that even when the share price was higher than HK$1.01 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Xiaoxuan Li.

Xiaoxuan Li bought a total of 15.56m shares over the year at an average price of HK$1.12. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for China New Higher Education Group

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does China New Higher Education Group Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. China New Higher Education Group insiders own about HK$1.0b worth of shares (which is 50% 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.

What Might The Insider Transactions At China New Higher Education Group Tell Us?

It doesn't really mean much that no insider has traded China New Higher Education Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like China New Higher Education Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 3 warning signs with China New Higher Education Group and understanding them should be part of your investment process.

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 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.