Whilst it may not be a huge deal, we thought it was good to see that the Sing Investments & Finance Limited (SGX:S35) MD, CEO & Executive Director, Sze Leong Lee, recently bought S$112k worth of stock, for S$1.11 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 12%.
Check out our latest analysis for Sing Investments & Finance
Notably, that recent purchase by Sze Leong Lee is the biggest insider purchase of Sing Investments & Finance shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$1.11). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Sze Leong Lee.
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!
Sing Investments & Finance is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 11% of Sing Investments & Finance shares, worth about S$29m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Sing Investments & Finance insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Sing Investments & Finance has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
But note: Sing Investments & Finance may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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 of direct interests only, but not derivative transactions or indirect interests.
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