2 companies with Insider Activity

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.

With these in mind, let’s take a look at two companies that have had insider activity over the past two weeks.

1. Haw Par Corporation Ltd (SGX: H02)

Haw Par Corporation, the company most famous for perhaps its Tiger Balm, has a history of more than a hundred years. While it started out as a Traditional Chinese Medicine (TCM) outfit, the company has since branched out in a number of different directions.

Besides having strategic investments in local shares like United Overseas Bank Ltd (SGX: U11) and UOL Group Limited (SGX: U14) among others, Haw Par also operates tourists attractions such as the Underwater World aquariums at Sentosa (Singapore) and Pattaya (Thailand).

On 14 November, Wee Investments Pte Ltd snapped up 1.2 million shares via the open market at S$8.50 each. Wee Investments happens to be an investment vehicle which three of Haw Par Corporation’s insiders have an interest in. They are namely: Wee Ee Chao, a non-executive director of the company; Wee Chow Yaw, non-executive chairman; and Wee Ee Lim, president and chief executive officer of the firm.

Wee Chow Yaw happens to be the father of both Wee Ee Chao and Wee Ee Lim.

Haw Par Corporation’s shares last traded at S$8.56 on Monday. At this price, the company has a price/earnings (PE) ratio of 15 and a dividend yield of 2.34%.

2. Oxley Holdings Ltd  (SGX: 5UX)

Oxley Holdings is a property developer engaged in the development of residential, commercial, and industrial projects. Since October 2010, the firm has launched some 27 developments mainly in Asia. Over the past year, it had launched two new overseas projects, the Royal Wharf in East London, and The Bridge in Phnom Penh.

On 17 November, Low See Ching, the deputy CEO of the Oxley Holdings, purchased 358,000 shares at around S$0.52 each. The transaction had increased his stake in the firm slightly from 58.94% to 58.95%.

Oxley Holdings’ shares last changed hands at S$0.525 on Monday. The company is valued at 33 times its trailing earnings at that price.

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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.