Selling SHS Holdings Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders
SHS Holdings Ltd.'s (SGX:566) stock price has dropped 12% in the previous week, but insiders who sold S$981k in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of S$1.27 is still below the current share price.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At SHS Holdings
The Group CEO & Executive Director, Han Kok Ng, made the biggest insider sale in the last 12 months. That single transaction was for S$981k worth of shares at a price of S$1.27 each. 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$0.12. So it may not shed much light on insider confidence at current levels. Han Kok Ng was the only individual insider to sell shares in the last twelve months.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for SHS Holdings
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insiders At SHS Holdings Have Sold Stock Recently
The last quarter saw substantial insider selling of SHS Holdings shares. In total, Group CEO & Executive Director Han Kok Ng dumped S$981k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of SHS Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that SHS Holdings insiders own 50% of the company, worth about S$35m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About SHS Holdings Insiders?
An insider hasn't bought SHS Holdings stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Our analysis shows 4 warning signs for SHS Holdings (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.
Of course SHS Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.