Insiders Give Up S$34k As Hong Lai Huat Group Stock Drops To S$0.06

Insiders who acquired S$334k worth of Hong Lai Huat Group Limited's (SGX:CTO) stock at an average price of S$0.067 in the past 12 months may be dismayed by the recent 12% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth S$300k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Hong Lai Huat Group

The Last 12 Months Of Insider Transactions At Hong Lai Huat Group

The Executive Deputy Chairman & Group CEO Bee Huat Ong made the biggest insider purchase in the last 12 months. That single transaction was for S$264k worth of shares at a price of S$0.066 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$0.06). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Bee Huat Ong was the only individual insider to buy shares in the last twelve months.

Bee Huat Ong purchased 5.00m shares over the year. The average price per share was S$0.067. You can see the insider transactions (by companies and 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!

Hong Lai Huat Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Hong Lai Huat Group Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Hong Lai Huat Group insiders own 60% of the company, currently worth about S$19m based on the recent share price. 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 Hong Lai Huat Group Insiders?

The fact that there have been no Hong Lai Huat Group insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Hong Lai Huat Group insiders think the business has merit. 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. To help with this, we've discovered 3 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Hong Lai Huat Group.

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, but not derivative transactions.

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

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.