Even if it's not a huge purchase, we think it was good to see that Yude Yan, the CEO & Executive Director of Virscend Education Company Limited (HKG:1565) recently shelled out HK$427k to buy stock, at HK$0.24 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for Virscend Education

Virscend Education Insider Transactions Over The Last Year

Notably, that recent purchase by Yude Yan is the biggest insider purchase of Virscend Education shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.23). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Yude Yan was the only individual insider to buy shares in the last twelve months.

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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Virscend Education

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Virscend Education insiders own 51% of the company, worth about HK$360m. 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 Virscend Education Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Virscend Education insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Virscend Education has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: Virscend Education 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, but not derivative transactions.

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.