The recent price decline of 12% in China New Higher Education Group Limited's (HKG:2001) stock may have disappointed insiders who bought CN¥17.5m worth of shares at an average price of CN¥1.12 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CN¥12.6m, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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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 an insider was happy to buy shares at above the current price of HK$0.81. 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. We always take careful note of the price insiders pay when purchasing 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. Xiaoxuan Li was the only individual insider to buy during the last year.

Xiaoxuan Li purchased 15.56m shares over the year. The average price per share was HK$1.12. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for China New Higher Education Group

China New Higher Education Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of China New Higher Education Group

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. China New Higher Education Group insiders own 50% of the company, currently worth about HK$631m 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.

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

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about China New Higher Education Group. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China New Higher Education Group. In terms of investment risks, we've identified 2 warning signs with China New Higher Education Group and understanding them should be part of your investment process.

But note: China New Higher 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.