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 with insiders that have bought shares over the past month, or in other words, putting more money where their mouth is.

1. Auric Pacific Group Limited  (SGX: A23)

Although Auric Pacific might not be a name that’s familiar to many, the company’s businesses actually touch the daily lives of many Singaporeans. It started off as a bakery back in the 1930s and has since expanded into the manufacturing, distribution, and retail of food essentials in Singapore.

Some of the brands under Auric Pacific’s manufacturing and distribution arm include Sunshine Bread, SCS (which makes dairy products like butter and cheese), and Gourmet (which offers delicatessen meats and pastas amongst other food products). The company also runs food & beverage retail establishments and counts 1Market, Food Junction, and Delifrance under its portfolio.

Dr. Andy Adhiwana, an Executive Director of Auric Pacific, had bought shares of the company on a number of occasions since 1 September 2015. All told, he had purchased a total of 161,100 shares for a sum of around S$119,000. The transactions had boosted Adhiwana’s stake in Auric Pacific from 21.88% to 22.04%.

Auric Pacific closed at S$0.76 on Friday.

2. IX Biopharma Ltd  (SGX: 42C)

The aptly-named iX Biopharma is a pharmaceutical company that’s engaged in the development and manufacturing of drugs for pain management and the treatment of male erectile dysfunction. According to its website, the company has three drugs under development – namely WafermineTM, WafernylTM and PheoniXTM.

WafermineTM is meant for acute and severe pain management together with opoids; WafernylTM  is targeted at the management of cancer pain; and PheoniX™ is meant to help patients with male erectile dysfunction. Aside from the three drugs which are still under clinical development, IX Biopharma also owns a laboratory testing business which generated free cash flow of S$2.5 million in the fiscal year ended 30 June 2015.

Ko Kheng Hwa, an independent director of IX Biopharma, had bought a total of 85,000 shares on two separate occasions in September (3 September and 8 September) for more than S$22,000. These purchases have brought his stake in IX Biopharma up from zero to 0.014%.

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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.