Selling InnoTek Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders
InnoTek Limited's (SGX:M14) stock price has dropped 12% in the previous week, but insiders who sold S$4.0m in stock over the past year have had less luck. The average selling price of S$0.65 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At InnoTek
Over the last year, we can see that the biggest insider sale was by the CEO and Executive & Non-Independent Director, Yiliang Lou, for S$4.0m worth of shares, at about S$0.65 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is S$0.44. So it may not shed much light on insider confidence at current levels. Yiliang Lou was the only individual insider to sell over the last year.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for InnoTek
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Does InnoTek Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that InnoTek insiders own 11% of the company, worth about S$13m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About InnoTek Insiders?
It doesn't really mean much that no insider has traded InnoTek shares in the last quarter. Our analysis of InnoTek insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing InnoTek. Case in point: We've spotted 5 warning signs for InnoTek you should be aware of, and 1 of these is a bit concerning.
But note: InnoTek 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.