Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of CapitaLand Ascott Trust (SGX:HMN), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
CapitaLand Ascott Trust Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Non-Independent Director of CapitaLand Ascott Trust Management Limited Joo Ling Teo bought S$490k worth of shares at a price of S$0.98 per share. That means that an insider was happy to buy shares at above the current price of S$0.83. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While CapitaLand Ascott Trust insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for CapitaLand Ascott Trust
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At CapitaLand Ascott Trust Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at CapitaLand Ascott Trust. We can see that Independent Non-Executive Director of CapitaLand Ascott Trust Management Limited Khum Whai Loh paid S$213k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that CapitaLand Ascott Trust insiders own 0.9% of the company, worth about S$28m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At CapitaLand Ascott Trust Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of CapitaLand Ascott Trust we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 4 warning signs for CapitaLand Ascott Trust (2 are significant!) that we believe deserve your full attention.
But note: CapitaLand Ascott Trust may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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