Possible Signal As Hiap Seng Industries Insiders Sell S$3.7m In Stock

Despite the fact that Hiap Seng Industries Limited (SGX:1L2) stock rose 10.0% last week, insiders who sold S$3.7m worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of S$0.025, which is higher than the current price, may have been the best decision.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Hiap Seng Industries Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Tian Yuan, sold S$2.6m worth of shares at a price of S$0.026 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of S$0.022. So it may not tell us anything about how insiders feel about the current share price. Tian Yuan was the only individual insider to sell over the last year.

Tian Yuan divested 146.00m shares over the last 12 months at an average price of S$0.025. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Hiap Seng Industries

I will like Hiap Seng Industries better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Hiap Seng Industries Have Sold Stock Recently

The last quarter saw substantial insider selling of Hiap Seng Industries shares. In total, insider Tian Yuan dumped S$3.7m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

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. Insiders own 13% of Hiap Seng Industries shares, worth about S$13m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Hiap Seng Industries Insiders?

An insider sold Hiap Seng Industries shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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. Case in point: We've spotted 6 warning signs for Hiap Seng Industries you should be aware of, and 2 of these can't be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.