In the stock market, insiders are a blanket term used to describe a company?s directors and management. Investors may want to sit up and take notice when there?s consistent insider purchases as it may indicate an undervalued share price. Persistent insider sales, on the other hand, may be a cause for concern regarding the strength of a company?s business, though it must be noted that insiders could be selling for purely personal reasons.
The actions of substantial shareholders with a company?s shares may also be worth watching. Substantial shareholders (those who control 5% or more of a company), may not…
In the stock market, insiders are a blanket term used to describe a company’s directors and management. Investors may want to sit up and take notice when there’s consistent insider purchases as it may indicate an undervalued share price. Persistent insider sales, on the other hand, may be a cause for concern regarding the strength of a company’s business, though it must be noted that insiders could be selling for purely personal reasons.
The actions of substantial shareholders with a company’s shares may also be worth watching. Substantial shareholders (those who control 5% or more of a company), may not always be involved with managing the firm, but their large stakes would mean that they likely have done the requisite homework.
With these in mind, let’s take a look at two companies with either insider or substantial shareholder activity over the past two weeks.
1. Comfortdelgro Corporation Ltd (SGX: C52)
It’s hard to miss Comfortdelgro’s large fleet of taxis in Singapore. But beyond that, the firm’s actually one of the world’s largest land transport companies with operations in seven countries including Australia, China, and the United Kingdom.
In Singapore, Comfortdelgro has two subsidiaries which the public are likely to be familiar with. They are namely, SBS Transit Ltd (SGX: S61), which runs public bus and train services, and Vicom Limited (SGX: V01), which provides vehicle inspection and testing services.
On 2 October 2015, BlackRock Inc, one of the largest asset managers in the world, had sold 251,200 shares of Comfortdelgro for nearly S$736,000. With the transaction, BlackRock’s total interest in Comfortdelgro had been pared down very slightly from 6% to 5.99%.
Comfortdelgro’s shares closed at S$3.00 yesterday. At that price, it’s valued at 22 times its trailing earnings.
2. Yongnam Holdings Limited (SGX: AXB)
Yongnam is a structural steel contractor and specialist civil engineering solutions provider with more than 30 years of experience. Some notable projects it has been involved with in the past include Changi Airport Terminal 1, parts of the Mass Rapid Transit (MRT) network here, and commercial development One Raffles Quay.
Some projects that Yongnam is currently working on include structural steelworks for Jewel at Changi Airport (a huge retail mall), and the construction of parts of the upcoming Downtown Line and Thomson Line for the MRT network. These projects are sizeable, with the MRT and Jewel contracts carrying a total worth of S$280 million and S$82 million respectively. For perspective, Yongnam had clocked revenue of S$212 million in the whole of 2014.
Seow Soon Yong, the managing director and chief executive of Yongnam, has been actively purchasing shares of his company on multiple occasions since 19 August 2015. From a stake of 10.55% on 19 August 2015, Seow now holds an 11.37% interest in Yongnam (as of 14 October 2015).
Yongnam’s stock last changed hands at S$0.40 apiece yesterday after having fallen by more than half from a 52-week peak of S$0.98 that was reached in late 2014. At S$0.40, Yongnam’s carrying a price-to-earnings ratio of 97.
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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.