Who Has Been Buying Centurion Corporation Limited (SGX:OU8) Shares?

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 Centurion Corporation Limited (SGX:OU8), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

See our latest analysis for Centurion

Centurion Insider Transactions Over The Last Year

The Deputy Chairman of Board Kok Hoe Wong made the biggest insider purchase in the last 12 months. That single transaction was for S$4.6m worth of shares at a price of S$0.46 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$0.36). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid S$10m for 24.30m shares. On the other hand they divested 4.70m shares, for S$2.2m. In the last twelve months there was more buying than selling by Centurion insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insiders at Centurion Have Bought Stock Recently

It's good to see that Centurion insiders have made notable investments in the company's shares. We can see that Joint Chairman of the Board Kim Kang Loh paid S$161k for shares in the company. No-one sold. That shows some optimism about the company's future.

Does Centurion Boast High 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. We usually like to see fairly high levels of insider ownership. It appears that Centurion insiders own 18% of the company, worth about S$55m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Centurion Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Centurion we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Centurion. When we did our research, we found 3 warning signs for Centurion (2 make us uncomfortable!) that we believe deserve your full attention.

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.

When trading Centurion or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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