Insider Sellers Might Regret Selling Shentong Robot Education Group Shares at a Lower Price Than Current Market Value

Shentong Robot Education Group Company Limited's (HKG:8206) value has fallen 19% in the last week, but insiders who sold HK$10m worth of stock over the last year have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of HK$0.05 is still below the current share price.

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.

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The Last 12 Months Of Insider Transactions At Shentong Robot Education Group

Over the last year, we can see that the biggest insider purchase was by insider Shaoxiao Yang for HK$9.6m worth of shares, at about HK$0.05 per share. That means that an insider was happy to buy shares at above the current price of HK$0.038. 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Shaoxiao Yang.

In total, Shentong Robot Education Group insiders sold more than they bought over the last year. 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!

Check out our latest analysis for Shentong Robot Education Group

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Shentong Robot Education Group Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Shentong Robot Education Group shares over the last three months. We note insiders cashed in HK$10m worth of shares. Meanwhile insider Shaoxiao Yang bought HK$9.6m worth , as we said above . The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership Of Shentong Robot Education Group

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. Shentong Robot Education Group insiders own about HK$19m worth of shares. That equates to 26% 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.

What Might The Insider Transactions At Shentong Robot Education Group Tell Us?

Unfortunately, there has been more insider selling of Shentong Robot Education Group stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Shentong Robot Education Group (of which 2 make us uncomfortable!) you should know about.

But note: Shentong Robot 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.