SDM Education Group Holdings Up 12%, Insiders Still In The Red By HK$3.2m

Insiders who bought HK$12.4m worth of SDM Education Group Holdings Limited (HKG:8363) stock in the last year have seen some of their losses recouped as the stock gained 12% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling HK$3.2m.

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.

View our latest analysis for SDM Education Group Holdings

SDM Education Group Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman & Compliance Officer Ka Lok Chiu bought HK$9.9m worth of shares at a price of HK$0.10 per share. That means that an insider was happy to buy shares at above the current price of HK$0.074. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months SDM Education Group Holdings insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

SDM Education Group Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does SDM Education Group Holdings 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. We usually like to see fairly high levels of insider ownership. It's great to see that SDM Education Group Holdings insiders own 71% of the company, worth about HK$36m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

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

It doesn't really mean much that no insider has traded SDM Education Group Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, SDM Education Group Holdings insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, SDM Education Group Holdings has 4 warning signs (and 3 which are a bit unpleasant) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.