Trade Alert: The Joint CEO & Executive Director Of Hong Fok Corporation Limited (SGX:H30), Pin Chuan Cheong, Has Just Spent S$748k Buying 5.1% More Shares

By
Simply Wall St
Published
October 14, 2020
SGX:H30

Hong Fok Corporation Limited (SGX:H30) shareholders (or potential shareholders) will be happy to see that the Joint CEO & Executive Director, Pin Chuan Cheong, recently bought a whopping S$748k worth of stock, at a price of S$0.68. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 5.1%.

View our latest analysis for Hong Fok

Hong Fok Insider Transactions Over The Last Year

Notably, that recent purchase by Pin Chuan Cheong is the biggest insider purchase of Hong Fok shares that we've seen in the last year. That implies that an insider found the current price of S$0.69 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Hong Fok insiders decided to buy shares at close to current prices.

Happily, we note that in the last year insiders paid S$1.2m for 1.71m shares. But insiders sold 180.00k shares worth S$147k. In the last twelve months there was more buying than selling by Hong Fok insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
SGX:H30 Insider Trading Volume October 14th 2020

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.

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. We usually like to see fairly high levels of insider ownership. Hong Fok insiders own about S$127m worth of shares. That equates to 22% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Hong Fok Insiders?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Hong Fok insiders are well aligned, and quite possibly think the share price is too low. 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. While conducting our analysis, we found that Hong Fok has 2 warning signs and it would be unwise to ignore these.

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.

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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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