As the saying goes: “The insiders know it best”. Substantial shareholders and directors of the company often have a clearer picture of the ins and outs of the company compared to a retail investor sitting on the sidelines. Many investors tend to keep an eye on any significant insider trades to gauge the level of confidence the management team or substantial shareholders have in the company. Consistent insider purchases may indicate the share price is undervalued and brings confidence to the price trend of the share price. On the other hand, continuous insider selling without a good reason may…
As the saying goes: “The insiders know it best”. Substantial shareholders and directors of the company often have a clearer picture of the ins and outs of the company compared to a retail investor sitting on the sidelines. Many investors tend to keep an eye on any significant insider trades to gauge the level of confidence the management team or substantial shareholders have in the company. Consistent insider purchases may indicate the share price is undervalued and brings confidence to the price trend of the share price. On the other hand, continuous insider selling without a good reason may be a potential sign of trouble.
With that in mind, let’s take a look at three companies with insider activity for the past week.
SembCorp Industries Limited (SGX: U96)
Sembcorp Industries Ltd provides utilities and a wide range of services for industrial sites such as power, gas, wastewater treatment and other on-site services. The Company’s businesses also include marine & offshore engineering and urban development comprising industrial parks and business, commercial and residential spaces. The Company’s principal activities are those of an investment holding company, with which the corporate headquarters gives strategic direction and provides management services to its subsidiaries.
Since the beginning of this year, Sembcorp has consistently bought back its shares and effectively paused the buying spree on 23 January. The cumulative share purchases changed from 2.61 million to 3.51 million, a difference of 900k shares which are part of the on-going share buyback scheme. In percentage terms, the interest in the firm now stands at 0.196% as compared to 0.146% just a few days ago.
Sembcorp Industries last traded at $5.24 on Wednesday. It sports a healthy dividend yield of 2.86% with a historical Price-to-earnings ratio of 11.7043.
See Hup Seng Limited (SGX: 566)
See Hup Seng is a leading corrosion prevention specialist in Singapore primarily in the business of grit blasting, painting, supply of equipment and machinery and rental of equipment. Over the years, the company has enhanced their core competencies and moved up the value chain to establish a strong niche in specialized tank coating services and large-scale plant operations.
On several occasions from 21 January to 24 January, Mr. Ng Han Kok, executive director of the firm has been fervently acquiring shares in the open market. His direct interest rose from 1.68% of the issued capital to 4.99%, a tad lower than 5%. That also amounts to 20.17 million shares being bought by him in just a few days.
See Hup Seng closed at $0.31 on Wednesday and trades at a Price-to-Earnings ratio of 16.32. It sports a dividend yield of 1.61%.
Croesus Retail Trust (SGX: S6NU)
Croesus Retail Trust (“CRT”) is the first Asia-Pacific retail business trust with an initial portfolio located in Japan listed on the Singapore exchange. As of 30 September 2013, its portfolio currently comprises 4 quality prime and suburban retail malls with an aggregate NLA (Net Lettable Area) of 181,675 square meters and committed occupancy of approximately 100%.
On 23 January 2014, Hwang Investment Management Berhad disposed 299,000 units of the Croesus retail trust on the open market. As a result, DBS Bank Limited’s deemed interest in the trust fell from 1.39% to 1.32%; with total interest dropping from 6.01% to 5.94% as its direct interest remains the same. Consequently, while Temasek Holdings has no direct interest in the voting units of Croesus Retail Trust, it has a change in deemed interest from 6.00% to 5.93%. The filing is reported as a notification due to Temasek’s stake in DBS Group Limited (SGX: D05).
Croesus Retail Trust last changed hands at $0.88 on Wednesday and its NAV is currently $0.906. It offers an annualized dividend yield of 8.4% but it is worth noting that the payout is committed at 100% only for the first 2 years while the dividend policy remains unclear after that period.
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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.