A-Smart Holdings Up 17%, Insiders Still In The Red By S$1.3m

Insiders who bought S$7.21m worth of A-Smart Holdings Ltd. (SGX:BQC) stock in the last year have seen some of their losses recouped as the stock gained 17% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled S$1.3m since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for A-Smart Holdings

The Last 12 Months Of Insider Transactions At A-Smart Holdings

The Non-Executive Chairman Wei Dong Ma made the biggest insider purchase in the last 12 months. That single transaction was for S$3.8m worth of shares at a price of S$0.10 each. That means that even when the share price was higher than S$0.082 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

A-Smart Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of A-Smart Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. A-Smart Holdings insiders own about S$17m worth of shares (which is 77% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About A-Smart Holdings Insiders?

The fact that there have been no A-Smart Holdings insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, A-Smart Holdings insiders feel good about the company's future. 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. For example, A-Smart Holdings has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: A-Smart Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.