Trade Alert: Yongqiang Wu At NutryFarm International Limited (SGX:AZT), Has Just Spent HK$589k Buying 18% More Shares

By
Simply Wall St
Published
January 05, 2022
SGX:AZT
Source: Shutterstock

Investors who take an interest in NutryFarm International Limited (SGX:AZT) should definitely note that insider Yongqiang Wu recently paid S$0.29 per share to buy S$589k worth of the stock. That's a very solid buy in our book, and increased their holding by a noteworthy 18%.

Check out our latest analysis for NutryFarm International

NutryFarm International Insider Transactions Over The Last Year

In fact, the recent purchase by insider Yongqiang Wu was not their only acquisition of NutryFarm International shares this year. Earlier in the year, they paid S$0.60 per share in a S$6.0m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$0.28). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Yongqiang Wu was the only individual insider to buy during the last year.

Yongqiang Wu bought 12.03m shares over the last 12 months at an average price of S$0.55. 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!

insider-trading-volume
SGX:AZT Insider Trading Volume January 5th 2022

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

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. A high insider ownership often makes company leadership more mindful of shareholder interests. NutryFarm International insiders own about S$23m worth of shares (which is 72% 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 NutryFarm International Insiders?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about NutryFarm International. One for the watchlist, at least! 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 4 warning signs for NutryFarm International (2 can't be ignored!) and we strongly recommend you look at these before investing.

Of course NutryFarm International 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, but not derivative transactions.

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