Chen Lin Education Group Holdings Insiders Enjoying CN¥800k Appreciation On CN¥5.20m Investment

Chen Lin Education Group Holdings Limited (HKG:1593) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a HK$124m addition to the company’s market value. As a result, the stock they originally bought for CN¥5.20m is now worth CN¥6.00m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Chen Lin Education Group Holdings

Over the last year, we can see that the biggest insider purchase was by Executive Director & Co-President Tian Gan for HK$5.2m worth of shares, at about HK$1.04 per share. Even though the purchase was made at a significantly lower price than the recent price (HK$1.20), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

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!

See our latest analysis for Chen Lin Education Group Holdings

Chen Lin Education Group Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Chen Lin Education Group Holdings

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. Chen Lin Education Group Holdings insiders own 60% of the company, currently worth about HK$712m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Chen Lin Education Group Holdings Insiders?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Chen Lin Education Group Holdings. That's what I like to see! 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. Case in point: We've spotted 1 warning sign for Chen Lin Education Group Holdings you should be aware of.

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.