Southern Packaging Group Gains 30%, Insider Trades Reap Benefit

Insiders who bought Southern Packaging Group Limited (SGX:BQP) stock in the last 12 months were richly rewarded last week. The company's market value increased by S$9.8m as a result of the stock's 30% gain over the same period. As a result, the stock they originally bought for CN¥542.8k is now worth CN¥1.28m.

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 Southern Packaging Group

The Last 12 Months Of Insider Transactions At Southern Packaging Group

In the last twelve months, the biggest single purchase by an insider was when insider Shek Chuen Jen bought S$278k worth of shares at a price of S$0.25 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of S$0.60. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Shek Chuen Jen bought 2.13m shares over the last 12 months at an average price of S$0.25. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Southern Packaging Group is not the only stock that insiders are buying. For those who like to find winning investments 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Southern Packaging Group insiders own about S$38m worth of shares (which is 91% of the company). 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 Do The Southern Packaging Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Southern Packaging Group shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Southern Packaging Group insiders feel good about the company's future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 4 warning signs for Southern Packaging Group (3 are concerning!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.