It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in MTQ Corporation Limited (SGX:M05).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At MTQ
In the last twelve months, the biggest single purchase by an insider was when CEO, MD of Oilfield Engineering Division Operations & Executive Director Boon Wee Kuah bought S$268k worth of shares at a price of S$0.20 per share. That means that even when the share price was higher, an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 3.40m shares worth S$669k. In total, MTQ insiders bought more than they sold over the last year. Their average price was about S$0.20. This is nice to see since it implies that insiders might see value around current prices (around S$0.19). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this freelist of growing companies that insiders are buying.
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. It appears that MTQ insiders own 36% of the company, worth about S$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About MTQ Insiders?
It doesn't really mean much that no insider has traded MTQ shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think MTQ insiders are doubting the company, and they do own shares. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course MTQ may not be the best stock to buy. So you may wish to see this freecollection of high quality companies.
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MTQ Corporation Limited, together with its subsidiaries, provides engineering solutions for oilfield equipment in Singapore, the Kingdom of Bahrain, Australia, the United Kingdom, and Indonesia.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
|Analysis Area||Score (0-6)|
Read more about these checks in the individual report sections or in our analysis model.
Mediocre balance sheet with questionable track record.