Founder of Raffles Education Hua Seng Chew Buys 1.7% More Shares

Investors who take an interest in Raffles Education Limited (SGX:NR7) should definitely note that the Founder, Hua Seng Chew, recently paid S$0.041 per share to buy S$317k worth of the stock. Although the purchase only increased their holding by 1.7%, it is still a solid purchase in our view.

View our latest analysis for Raffles Education

The Last 12 Months Of Insider Transactions At Raffles Education

The insider Gim Lian Chung made the biggest insider purchase in the last 12 months. That single transaction was for S$638k worth of shares at a price of S$0.046 each. That means that an insider was happy to buy shares at above the current price of S$0.043. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

In the last twelve months Raffles Education insiders were buying shares, but not selling. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

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. Raffles Education insiders own 59% of the company, currently worth about S$35m 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 Raffles Education Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Raffles Education insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! 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. To that end, you should learn about the 2 warning signs we've spotted with Raffles Education (including 1 which doesn't sit too well with us).

But note: Raffles 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 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.