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3 Significant Insider Purchases for the Past Week

insider buying

As the old cliché goes, “The insiders know it best”. Substantial shareholders and directors of a company can be said to understand the ins and outs of their own company better as compared to a retail investor sitting on the sidelines.

Thus, many people usually keep an eye on any significant insider trades to gauge the level of confidence the management team or substantial shareholders have in their own company. Consistent insider purchases may indicate an undervalued share price. On the other hand, continuous insider selling without a good reason may be a potential sign of trouble.

Let’s take a look at three companies with insider money moves in the past week.

1. Courts Asia Limited (SGX: RE2)

Courts Asia Limited is one of the leading electrical products, IT products and furniture retailers in Singapore and Malaysia, having had a retail presence for more than 35 years in Singapore and more than 25 years in Malaysia. The Group believes that it has a strong brand with broad customer reach and favorable customer perceptions. The Group’s business model integrates retail and credit while offering a distinct value proposition for its customers.

On top of the steady daily company buybacks, Adnan Abdulaziz Ahmed AlBahar, a non-independent and non-executive director of the company, purchased 100,000 shares and 694,000 shares on 2th and 6th January respectively. He now holds a direct interest of 938,000 shares, equivalent to 0.168% of the total number of voting shares in Courts Asia. The company is currently trading at a PE ratio of 8.9 and sports a dividend yield of 1.23%. Shares of Courts Asia last traded at $0.62 on Thursday’s close.

2. Memstar Technology Limited (SGX: 5MS)

Memstar Technology Limited manufactures and distributes polyvinylidene fluoride hollow fiber membrane products. The Company’s products are used for water separation and water treatment in various industry sectors and households.

On 6 Jan, Alan Wang acquired 11.888 million shares (0.4476% of the issued capital) at about $0.10 cents each from the open market, bumping up his interest over the 5% threshold that qualifies him makes as a substantial shareholder in Memstar. The company is currently valued at 23 times trailing earnings and does not give out any dividends at the moment. It closed at $0.104 on Thursday.

3. Biosensors International Group (SGX: B20) or BIG

The Group is a maker of innovative medical devices used to treat blocked arteries in interventional cardiology and critical care procedures. BIG is working on multiple product launches to generate new revenue streams for the company. There are a number of products gaining ground with various regulatory approvals and the soft launch of Bio-Freedom, a drug-coated stent, remains a source of excitement.

Biosensors has been actively buying back its own shares over the past two weeks. On 2nd January, Jack Wang Chicheng, CEO of Biosensors, exercised his share options for 150,000 shares which amounts to US$16,380. He now holds a total of 300,000 shares which is equivalent to 0.018% of the number of voting shares. Nevertheless, the exercise of options is still relatively low as compared to the 9,035,111 rights/options/warrants of BIG that Jack Wang has a direct interest in.

The company’s currently valued at a price-to-earnings ratio of 15.3 and its dividend yield is at 2.90%. Its shares last changed hands at $0.88 on Thursday.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.