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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of IFS Capital Limited (SGX:I49), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for IFS Capital
The Last 12 Months Of Insider Transactions At IFS Capital
Notably, that recent purchase by Cheng Leong Sim is the biggest insider purchase of IFS Capital shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of S$0.11. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While IFS Capital insiders bought shares during the last year, they didn't sell. They paid about S$0.12 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
IFS Capital Insiders Bought Stock Recently
It's good to see that IFS Capital insiders have made notable investments in the company's shares. Group CEO & Executive Director Cheng Leong Sim spent S$123k on stock, and there wasn't any selling. This makes one think the business has some good points.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. IFS Capital insiders own about S$27m worth of shares (which is 65% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.