Those following along with Chip Eng Seng Corporation Ltd (SGX:C29) will no doubt be intrigued by the recent purchase of shares by Celine Tang, Non-Executive Chairman of the company, who spent a stonking S$2.6m on stock at an average price of S$0.42. While that only increased their holding size by 2.1%, it is still a big swing by our standards.
The Last 12 Months Of Insider Transactions At Chip Eng Seng
In fact, the recent purchase by Non-Executive Chairman Celine Tang was not their only acquisition of Chip Eng Seng shares this year. They previously made an even bigger purchase of S$2.7m worth of shares at a price of S$0.43 per share. That means that an insider was happy to buy shares at above the current price of S$0.41. 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. The only individual insider to buy over the last year was Celine Tang.
Celine Tang purchased 12.43m shares over the year. The average price per share was S$0.43. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Chip Eng Seng
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Chip Eng Seng insiders own 45% of the company, currently worth about S$145m 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 Do The Chip Eng Seng Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Chip Eng Seng. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 3 warning signs we've spotted with Chip Eng Seng (including 2 which are concerning).
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, but not derivative transactions.
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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.