Insiders Who Purchased AU$3.87m Of Vmoto Stock May Not Have Expected 11% Tumble

Insiders who bought AU$3.87m worth of Vmoto Limited's (ASX:VMT) stock at an average buy price of AU$0.18 over the last year may be disappointed by the recent 11% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$2.65m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Vmoto

The Last 12 Months Of Insider Transactions At Vmoto

The MD & Executive Director Yiting Chen made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.4m worth of shares at a price of AU$0.15 each. That means that an insider was happy to buy shares at above the current price of AU$0.13. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

Vmoto insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.18. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insiders At Vmoto Have Bought Stock Recently

It's good to see that Vmoto insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$2.6m worth of shares. That shows some optimism about the company's future.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Vmoto insiders own 69% of the company, currently worth about AU$34m based on the recent share price. 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 Vmoto Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Vmoto. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Vmoto. Case in point: We've spotted 2 warning signs for Vmoto you should be aware of.

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.