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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Hong Lai Huat Group Limited (SGX:CTO).
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for Hong Lai Huat Group
Hong Lai Huat Group Insider Transactions Over The Last Year
Executive Deputy Chairman & Group CEO Bee Huat Ong previously made an even bigger purchase of S$181k worth of shares at a price of S$0.14 per share. That means that even when the share price was higher than S$0.13 (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. To us, it's very important to consider the price insiders pay for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Bee Huat Ong was the only individual insider to buy shares in the last twelve months.
Bee Huat Ong bought a total of 3.88m shares over the year at an average price of S$0.14. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Hong Lai Huat Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Hong Lai Huat Group
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's great to see that Hong Lai Huat Group insiders own 44% of the company, worth about S$13m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.