With Hoe Leong Up 100%, Insider Buyers Count Their Returns

Last week, Hoe Leong Corporation Ltd. (SGX:H20) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 100% last week, resulting in a S$15m increase in the company's market worth, implying a 100% gain on their initial purchase. In other words, the original S$133.3k purchase is now worth S$266.9k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Hoe Leong Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Chee Beng Lew bought S$133k worth of shares at a price of S$0.001 per share. Even though the purchase was made at a significantly lower price than the recent price (S$0.002), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Hoe Leong

Hoe Leong is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Hoe Leong

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Hoe Leong insiders own 58% of the company, currently worth about S$18m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Hoe Leong Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Hoe Leong. Nice! While it's good to be aware of 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. Case in point: We've spotted 3 warning signs for Hoe Leong you should be aware of, and 2 of these are a bit unpleasant.

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 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.