One of the more commonly used strategies by investors is to follow insider transactions. Some might even assume that since insiders are “in the know”, they might be better equipped to predict the share price of a company. Consistent insider purchases may indicate an undervalued share price. On the other hand, there might be others who would turn the argument around and say that if insiders are selling, then bad news is likely to be around the corner – though it must be noted that there is no basis for that as insiders might be selling for…
One of the more commonly used strategies by investors is to follow insider transactions. Some might even assume that since insiders are “in the know”, they might be better equipped to predict the share price of a company.
Consistent insider purchases may indicate an undervalued share price. On the other hand, there might be others who would turn the argument around and say that if insiders are selling, then bad news is likely to be around the corner – though it must be noted that there is no basis for that as insiders might be selling for their own personal reasons.
In addition, while substantial shareholders are often not involved with running the company and are thus not strictly classified as ‘insiders’, their moves with a company’s shares might be worth noting too for the simple reason that substantial shareholders have a big stake in a company and would likely have done the requisite homework.
With that in mind, let’s take a look at three companies with both insider and substantial shareholder activity over the past two weeks.
1. Figtree Holdings Limited (SGX: 5F4)
Figtree Holdings specialises in the design and building of commercial and industrial facilities. At a deeper level, the company looks after the entire project development process, which includes the search for land, liason with authorities, feasibility studies, and the design and construction itself.
Its main operations are based in Singapore but the company also provides design and construction management consulting services in other countries like Malaysia and China.
From 25 June to 30 June 2014, Mr. Danny Siaw, managing director and executive chairman of Figtree Holdings, acquired a total of 950,000 shares at an average price of around S$0.25 each via the open market. The transactions increased his directly-held stake in the company from 22.88% to 23.23%. Incidentally, he also has a deemed interest of 0.08% in Figtree Holdings due to the shares of the company held by his wife, Mdm Tay Guek Nah.
Figtree Holdings’ last traded price stood at S$0.25 as of last Friday. Based on its financial results for 2013, it has a P/E (price earnings ratio) of 8 and offers a juicy historical dividend yield of 4.8% with its dividend payout of 1.2 Singapore cents per share.
2. Oxley Holdings (SGX: 5UX)
Oxley Holdings is a lifestyle property developer which is primarily engaged in the development of residential, commercial, and industrial projects. Some of its significant developments in Singapore include Devonshire Residences, Viva Vista, Oxley BizHub, Oxley Tower, and Robinson Square. Most of these developments are fully sold out, while the rest continue to be well- received by the market. Over the past year, it has been venturing overseas with 2 projects: The Bridge in Cambodia, and Royal Wharf in the United Kingdom.
On 27 June and 1 July 2014, Mr. Tee Wee Sien, a substantial shareholder of the company, purchased 299,000 and 100,000 shares at a price per share of S$0.70 and S$0.69 respectively. As a result, his stake in the company rose from 12.03% to 12.05%.
Oxley Holdings last changed hands at S$0.71 on Friday, marginally up from Tee’s share acquisition prices. It is currently selling at a low P/E ratio of 7 but sports an annualized dividend yield of only 0.42%.
3. Yoma Strategic Holdings Limited (SGX: Z59)
Yoma Strategic can be considered a pure play on Myanmar with its business activities being largely concentrated in the country. Currently, Yoma Strategic’s main business interests in Myanmar lie in real estate, agricultural activities, luxury travel, and automobile dealerships. Besides those, the company is also continuously finding collaboration opportunities with other companies which are interested to venture into Myanmar. An example is a joint venture with Parkson Retail Asia (SGX: O9E) and First Myanmar Investment Co. to develop and operate department stores in the country.
On 27 June, money management firm Aberdeen Asset Management PLC scooped up a whooping 9.88 million shares shares at an average price of S$0.70 each via the open market. Aberdeen now owns 87.3 million shares of Yoma Strategic as a result of its recent purchase and is in control of 7.54% of the company.
Yoma Strategic closed at S$0.725 last Friday and is valued at a lofty 55 times trailing earnings. It has not paid out a dividend over the last 12 months.
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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 owns shares in Oxley Holdings and Figtree Holdings mentioned.