It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Reenova Investment Holding Limited (SGX:5EC).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
See our latest analysis for Reenova Investment Holding
Reenova Investment Holding Insider Transactions Over The Last Year
Notably, that recent purchase by Tong Chen is the biggest insider purchase of Reenova Investment Holding shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of S$0.003. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Reenova Investment Holding insider decided to buy shares at close to current prices. Tong Chen was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by 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!
Reenova Investment Holding is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Reenova Investment Holding Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Reenova Investment Holding insiders own 19% of the company, worth about S$3.4m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Reenova Investment Holding Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Reenova Investment Holding shares, given these transactions (along with notable insider ownership of the company). Along with insider transactions, I recommend checking if Reenova Investment Holding is growing revenue. This free chart of historic revenue and earnings should make that easy.