Insider buying is always worth taking note of, especially when it takes place at a company with a low market capitalization. These companies are not widely covered by analysts and research has shown that they are prone to larger share price moves as they are priced less efficiently.
Here, we are going to highlight insider buying at a small US company, Aspen Group Inc (ASPU:US). Aspen Group is an education technology business that is based in New York. It provides higher education services online through its two universities, Aspen University and United States University. Its mission is to make higher education affordable. It’s traded on the Nasdaq Stock Exchange and currently has a market capitalization of $139 million.
Aspen Group Inc: Insider Buying
Our data shows that a Director at Aspen Group, Douglas Kass, made a number of purchases of ASPU stock between September 22 and October 7 15. During this period, the insider bought a total of 73,000 ASPU shares at an average price of $5.39. These share purchases cost Kass around $394,410 and increased his holding in the company by 146%.
This insider trading activity is worth highlighting due to the fact Kass has decades of experience in the financial industry. He is the Founder and President of Seabreeze Partners Management, a private-owned hedge fund sponsor. He is also a board member of MVC Capital. His trading knowledge has led to him contributing to The Street.com as well as Barron’s, and he has appeared as a guest on CNBC Squawkbox. This means he is likely to be an extremely adept trader.
Additionally, the monetary amount spent on the stock and the large increase in the Director’s holding in percentage terms both suggests he is very confident in the future prospects of the company. Our Insider Model gives Aspen Group a score of 3 which indicates insider sentiment is positive.
Aspen Group’s recent Q1 results showed that the company is making progress towards its goals, with all three of its business units, Aspen Online Nursing + Other, Aspen BSN Pre-Licensure, and USU, delivering growth year-over-year.
For the period, the group reported a record revenue of $19.4 million, which was up 28% year on year. Gross profit of $10.4 million was up on the $9 million produced in Q1 2020 while EBITDA improved slightly to $0.1 million from break even. New student enrollments at United States University were up 18% year over year.
“The first quarter delivered positive sequential improvement in our operating and profitability metrics. A portion of this performance is attributable to our recently instated Aspen 2.0 strategy, whereby we invest only in our highest LTV programs while continuing to control expenses. We expect profitability gains from Aspen 2.0 to have the greatest impact in the second half of Fiscal 2022 as we continue to realize the benefits of growth in our highest efficiency businesses,” said Michael Mathews, Chairman and CEO of Aspen Group.
On the back of these encouraging results and optimistic outlook, we see the recent pattern of buying at Aspen Group as bullish. It suggests that the Director believes that the company can grow and increase profitability which would arrest the recent decline in its share price.