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$72k worth of stock, for S$0.65 per share. However, we do note that it only increased their holding by 0.1%, and it wasn’t a huge purchase by absolute value, either.
Hong Fok Insider Transactions Over The Last Year
In fact, the recent purchase by Joint CEO & Director Sim Eng Cheong was not their only acquisition of 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$0.56. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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. Sim Eng Cheong was the only individual insider to buy shares in the last twelve months. We note that Sim Eng Cheong was also the biggest seller.
Sim Eng Cheong bought a total of 1.21m shares over the year at an average price of S$0.83. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Hong Fok is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Hong Fok insiders own 33% of the company, worth about S$178m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Hong Fok Tell Us?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Hong Fok insiders feel good about the company’s future. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example – Hong Fok has 3 warning signs we think you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 email@example.com. 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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