It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Suntec Real Estate Investment Trust (SGX:T82U), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Suntec Real Estate Investment Trust Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Yigang Tang bought S$62m worth of shares at a price of S$1.87 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 35.40m shares worth S$66m. In total, Suntec Real Estate Investment Trust insiders bought more than they sold over the last year. The average buy price was around S$1.86. These transactions suggest that insiders have considered the current price of S$1.76 attractive. The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Suntec Real Estate Investment Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Suntec Real Estate Investment Trust Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Suntec Real Estate Investment Trust. We can see that Yigang Tang paid S$2.0m for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Does Suntec Real Estate Investment Trust Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Suntec Real Estate Investment Trust insiders own 26% of the company, currently worth about S$899m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Suntec Real Estate Investment Trust Insider Transactions Indicate?
It is good to see recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Suntec Real Estate Investment Trust insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Suntec Real Estate Investment Trust, you should check out this free report on analyst forecasts for the company.
Of course Suntec Real Estate Investment Trust may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.