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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of IDP Education Limited (ASX:IEL), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for IDP Education
The Last 12 Months Of Insider Transactions At IDP Education
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Ariane Barker bought AU$82k worth of shares at a price of AU$16.44 per share. That means that even when the share price was higher than AU$15.02 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While IDP Education insiders bought shares during the last year, they didn't sell. 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!
IDP Education is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At IDP Education Have Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at IDP Education. Insiders shelled out AU$70k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
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. Based on our data, IDP Education insiders have about 0.1% of the stock, worth approximately AU$5.0m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About IDP Education Insiders?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on IDP Education stock. 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. While conducting our analysis, we found that IDP Education has 1 warning sign and it would be unwise to ignore this.