Reversal Of Fortune For Advanced Holdings Insiders Who Made A S$5.02m Purchase

Some of the losses seen by insiders who purchased S$5.02m worth of Advanced Holdings Ltd. (SGX:BLZ) shares over the past year were recovered after the stock increased by 17% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling S$2.8m.

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 Advanced Holdings

Advanced Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Siok Ling Low bought S$4.0m worth of shares at a price of S$0.31 per share. That means that an insider was happy to buy shares at above the current price of S$0.14. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid S$5.0m for 16.00m shares. But they sold 12.80m shares for S$4.0m. Overall, Advanced Holdings insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Advanced Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Advanced Holdings Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Advanced Holdings insiders own 68% of the company, currently worth about S$9.6m 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.

What Might The Insider Transactions At Advanced Holdings Tell Us?

The fact that there have been no Advanced Holdings insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Advanced 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. Our analysis shows 2 warning signs for Advanced Holdings (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.

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.

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