2 Companies with Insider and Substantial Shareholder Activity

Credit: reynermedia

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 (shareholders who control 5% or more of a company) are often not involved with managing 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 these in mind, let’s take a look at two companies with either insider activity or substantial shareholder activity over the past few weeks.

1. Holdings Ltd (SGX: 5AM)

Just as its name suggests, is an online hotel and travel agency with operations and offices across Asia, the Middle East, and Europe.

The firm had recently won the Best Online Travel Agency 2015 award given by TTG Travel Awards Asia Pacific. It’s the third consecutive year in which had won the honour.

On 1 December 2015, Ong Nai Pew, a substantial shareholder of the firm, had snapped up 258,000 shares for a total sum of S$47,888. The trade had increased Ong’s interest in slightly from 6.99% to 7.06%. On an interesting side note, Ong was’s chief executive from March to December 2005, and its co-chairman from November 2004 to March 2005. last changed hands at S$0.18 with no price-to-earnings ratio to speak of as the firm is currently sitting on a loss over the last 12 months. The company has been making losses since its fiscal year ended 30 September 2011.

2. Yanlord Land Group Limited (SGX: Z25)

Yanlord Land is a China-based real estate developer. The company has a focus on residential, commercial, and fully-integrated real estate projects. . Yanlord Land has a presence in five major economic regions in China, namely, the Yangtze River Delta, the Pearl River Delta, Western China, Bohai Rim, and Hainan.

Beyond the property development business, Yanlord Land also has property investments and provides real estate management services. These help to generate recurrent income.

On 1 and 2 December, Yanlord Land’s chairman and chief executive, Zhong Sheng Jian, had purchased a total of 2 million shares for a total sum of S$2.099 million. The trades had bumped up his stake in the firm from 66.415% to 66.517%.

Yanlord Land’s shares last closed at S$1.00. At that price, the firm’s valued at just 0.45 times its latest book value.

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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.