Are Insiders Buying The Hour Glass Limited (SGX:AGS) Stock?

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell The Hour Glass Limited (SGX:AGS), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

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 equally, we would consider it foolish to ignore insider transactions altogether. 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’.

Check out our latest analysis for Hour Glass

The Last 12 Months Of Insider Transactions At Hour Glass

Co-Founder & Executive Chairman Yun Tay made the biggest insider purchase in the last 12 months. That single transaction was for S$8.5m worth of shares at a price of S$0.66 each. That means that an insider was happy to buy shares at around the current price. 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. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then. Yun Tay was the only individual insider to buy shares in the last twelve months.

Yun Tay bought a total of 22.97m shares over the year at an average price of S$0.66. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

SGX:AGS Recent Insider Trading, February 28th 2019
SGX:AGS Recent Insider Trading, February 28th 2019

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Hour Glass

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Hour Glass insiders own about S$63m worth of shares. That equates to 14% 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.

What Might The Insider Transactions At Hour Glass Tell Us?

It doesn’t really mean much that no insider has traded Hour Glass shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Hour Glass and their transactions don’t cause us concern. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.