What Do HRnetGroup Limited (SGX:CHZ) Insiders Know That You Don’t?
In This Article:
HRnetGroup Limited, an investment holding company, engages in the recruitment and staffing business in Asia. HRnetGroup is one of Singapore’s small-cap stocks that saw some insider buying over the past three months, with insiders investing in more than 1 million shares during this period. A well-known argument is that insiders investing more in their own companies’ shares sends an optimistic signal. The MIT Press (1998) published an article showing that stocks following insider buying outperformed the market by 4.5%. However, it may not be sufficient to base your investment decision merely on these signals. I’ve assessed two potential reasons behind the insiders’ latest motivation to buy more shares.
Check out our latest analysis for HRnetGroup
Who Are Ramping Up Their Shares?
Over the past three months, more shares have been bought than sold by HRnetGroup’s’ insiders. In total, individual insiders own over 33 million shares in the business, which makes up around 3.28% of total shares outstanding. .
The entity that bought on the open market in the last three months was
Advertisement: High Yield Savings Offers
Simco Trust. Although this is an institutional investor, rather than a company executive or board member, the insights gained from direct access to management as a large investor would make it more well-informed than the average retail investor. In this specific instance, I would classify this investor as a company insider.
Is Future Growth Outlook As Bullish?
At first glance, analysts’ earnings expectations of 8.94% over the next three years illustrates a restrained outlook moving forward, however, insiders may be more optimistic than the market, with their net buying activity. Probing further into annual growth rates,HRnetGroup is believed to experience a restrained level of top-line growth over the next year, but a double-digit earnings growth at 11.43%. This may be due to effective cost reduction initiatives implemented by the company to drive higher earnings. Net buying could signal high insider confidence, perhaps due to their belief of sustainable growth. Or they may simply see the current stock price is undervalued relative to intrinsic value.
Did Stock Price Volatility Instigate Buying?
Another factor we should consider is whether the timing of these insider transactions coincide with any significant share price movements. A correlation could mean directors are trading on market inefficiencies based on their belief of the company’s intrinsic value. Within the past three months, HRnetGroup’s share price traded at a high of SGD0.88 and a low of SGD0.71. This indicates some volatility with a share price change of of 24.11%. This may not be large enough to warrant any significant purchases, therefore the underlying driver may be the insiders’ belief of company growth prospects or simply their personal portfolio rebalancing.