Whilst it may not be a huge deal, we thought it was good to see that the Hong Fok Corporation Limited (SGX:H30) Joint CEO & Director, Sim Eng Cheong, recently bought S$85k worth of stock, for S$0.80 per share. However, we do note that it only increased their holding by 0.09%, and it wasn’t a huge purchase by absolute value, either.
The Last 12 Months Of Insider Transactions At Hong Fok
Notably, that recent purchase by Joint CEO & Director Sim Eng Cheong was not the only time they bought Hong Fok shares this year. They previously made an even bigger purchase of S$313k worth of shares at a price of S$0.89 per share. That means that an insider was happy to buy shares at above the current price of S$0.84. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Sim Eng Cheong.
Sim Eng Cheong bought a total of 1.81m shares over the year at an average price of S$0.80. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Hong Fok Boast High 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. We usually like to see fairly high levels of insider ownership. Hong Fok insiders own about S$235m worth of shares (which is 33% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Hong Fok Insiders?
It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Hong Fok. One for the watchlist, at least! Along with insider transactions, I recommend checking if Hong Fok is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Hong Fok may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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