Stock Analysis

Insiders at SDM Education Group Holdings Limited (HKG:8363) snagged a bargain: a HK$991k profit on a HK$12m buy

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SDM Education Group Holdings Limited (HKG:8363) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 17% decline in the stock price. After accounting for the recent loss, the HK$12m worth of shares they purchased is now worth HK$13m, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for SDM Education Group Holdings

The Last 12 Months Of Insider Transactions At SDM Education Group Holdings

Notably, that recent purchase by Ka Lok Chiu is the biggest insider purchase of SDM Education Group Holdings shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of HK$0.11. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for SDM Education Group Holdings share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid HK$12m for 123.88m shares. On the other hand they divested 70.00k shares, for HK$7.6k. Overall, SDM Education Group Holdings insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

SEHK:8363 Insider Trading Volume March 15th 2023

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Insiders At SDM Education Group Holdings Have Bought Stock Recently

Over the last quarter, SDM Education Group Holdings insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought HK$12m worth of shares. This could be interpreted as suggesting a positive outlook.

Does SDM Education Group Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that SDM Education Group Holdings insiders own 71% of the company, worth about HK$52m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The SDM Education Group Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about SDM Education Group Holdings. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing SDM Education Group Holdings. To that end, you should learn about the 5 warning signs we've spotted with SDM Education Group Holdings (including 3 which are concerning).

Of course SDM Education Group Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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