IFS Capital Reaches S$47m Market Cap Benefiting Insider Stock Buying

Last week, IFS Capital Limited (SGX:I49) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 13% last week, resulting in a S$5.3m increase in the company's market worth, implying a 12% gain on their initial purchase. As a result, their original purchase of S$123.2k worth of stock is now worth S$137.5k.

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 IFS Capital

The Last 12 Months Of Insider Transactions At IFS Capital

The Group CEO & Executive Director Cheng Leong Sim made the biggest insider purchase in the last 12 months. That single transaction was for S$123k worth of shares at a price of S$0.11 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of S$0.13. 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. By clicking on the graph below, you can see the precise details of each insider transaction!

IFS Capital 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that IFS Capital insiders own 66% of the company, worth about S$31m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About IFS Capital Insiders?

The fact that there have been no IFS Capital insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like IFS Capital insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing IFS Capital. To that end, you should learn about the 5 warning signs we've spotted with IFS Capital (including 2 which are significant).

Of course IFS Capital 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.