Insiders Rewarded With S$1.1m Addition To Investment As HG Metal Manufacturing Stock Hits S$53m

HG Metal Manufacturing Limited (SGX:BTG) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a S$9.7m rise in the company's market capitalisation, translating to a gain of 15% on their initial investment. Put another way, the original S$6.97m acquisition is now worth S$8.02m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for HG Metal Manufacturing

HG Metal Manufacturing Insider Transactions Over The Last Year

The insider Jun Xue made the biggest insider purchase in the last 12 months. That single transaction was for S$3.5m worth of shares at a price of S$0.28 each. We do like to see buying, but this purchase was made at well below the current price of S$0.32. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months HG Metal Manufacturing insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. 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).

Does HG Metal Manufacturing Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 27% of HG Metal Manufacturing shares, worth about S$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About HG Metal Manufacturing Insiders?

It doesn't really mean much that no insider has traded HG Metal Manufacturing shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think HG Metal Manufacturing insiders are doubting the company, and they do own shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 4 warning signs for HG Metal Manufacturing that deserve your attention before buying any shares.

Of course HG Metal Manufacturing 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com