SHS Holdings' Stock Sinks To S$0.12, But Insiders Sold Even Lower

Even though SHS Holdings Ltd. (SGX:566) has fallen by 11% over the past week , insiders who sold S$650k worth of stock over the past year have had less luck. The average selling price of S$0.13 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for SHS Holdings

SHS Holdings Insider Transactions Over The Last Year

The Group CEO & Executive Director, Han Kok Ng, made the biggest insider sale in the last 12 months. That single transaction was for S$441k worth of shares at a price of S$0.12 each. That means that an insider was selling shares at around the current price of S$0.12. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. The only individual insider seller over the last year was Han Kok Ng.

Han Kok Ng sold a total of 5.03m shares over the year at an average price of S$0.13. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

SHS Holdings Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of SHS Holdings shares over the last three months. In total, Group CEO & Executive Director Han Kok Ng sold S$650k worth of shares in that time. Meanwhile insider Robert Stone bought S$84k worth , as we said above . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

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. SHS Holdings insiders own 41% of the company, currently worth about S$29m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At SHS Holdings Tell Us?

The stark truth for SHS Holdings is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since SHS Holdings is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. You'd be interested to know, that we found 3 warning signs for SHS Holdings and we suggest you have a look.

Of course SHS Holdings 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.