Hong Fok Corporation Limited (SGX:H30) Insiders Increased Their Holdings

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Hong Fok Corporation Limited (SGX:H30), you may well want to know whether insiders have been buying or selling.

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 in the company. 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 it is perfectly logical to keep tabs on what insiders are doing. 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'.

View our latest analysis for Hong Fok

The Last 12 Months Of Insider Transactions At Hong Fok

The Joint CEO & Executive Director Pin Chuan Cheong made the biggest insider purchase in the last 12 months. That single transaction was for S$748k worth of shares at a price of S$0.68 each. That implies that an insider found the current price of S$0.71 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Hong Fok insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Hong Fok 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.

Hong Fok Insiders Bought Stock Recently

It's good to see that Hong Fok insiders have made notable investments in the company's shares. Specifically, Joint CEO & Executive Director Sim Eng Cheong bought S$106k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Hong Fok Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Hong Fok insiders own 22% of the company, worth about S$135m. 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 Hong Fok Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Hong Fok. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Hong Fok. At Simply Wall St, we found 3 warning signs for Hong Fok that deserve your attention before buying any shares.

Of course Hong Fok 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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This article by Simply Wall St is general in nature. 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.
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