Market cap

Beng Soon Machinery Holdings Limited (HKG: 1987)) market cap drops to HK $ 2.1 billion, but insiders who sold S $ 31 million shares were able to cover their losses

Insiders appear to have made the most of their holdings by selling S $ 31million of Beng Soon Machinery Holdings Limited (HKG: 1987) at an average selling price of $ 2.47 over the past year. The company’s market valuation fell by HK $ 320 million after the stock price fell 13% over the past week, but insiders were spared painful losses.

While we never suggest that investors should base their decisions solely on what the directors of a company have done, we consider it foolish to ignore insider trading altogether.

Check out our latest review for Beng Soon Machinery Holdings

The Last 12 Months of Insider Trading at Beng Soon Machinery Holdings

Over the past year, we can see that the biggest insider sale was done by Executive Director Kam Fai Cheung for HK $ 13million in shares, at around HK $ 2.05 per share. . This means that an insider was selling shares for a lower price than the current price (HK $ 2.06). Generally, we find it disheartening when insiders sell below the current price, as it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we cannot be sure that this means that insiders think stocks are fully valued, so it is only a weak sign. We note that the biggest single sale was 72% of Kam Fai Cheung’s stake. Kam Fai Cheung was the only individual insider to sell shares in the past twelve months.

Kam Fai Cheung sold a total of 12.50 million shares during the year at an average price of S $ 2.47. The chart below shows insider trading (by companies and individuals) over the past year. If you click on the chart you can see all of the individual trades including the stock price, individual and date!

SEHK: 1987 Insider trading volume September 30, 2021

If you are like me then you not want to miss it free list of growing companies that insiders buy.

Does Beng Soon Machinery Holdings have strong insider ownership?

Many investors like to check how well a company is owned by insiders. Strong insider ownership often makes company management more concerned with the interests of shareholders. It’s great to see that the insiders of Beng Soon Machinery Holdings own 51% of the company, worth around HK $ 1.0 billion. I like to see this level of insider ownership because it increases the chances that management is thinking in the best interests of shareholders.

So what does this data suggest about Beng Soon Machinery Holdings insiders?

We certainly don’t mind the fact that there hasn’t been any insider trading from Beng Soon Machinery Holdings recently. While we are pleased with the high insider ownership of Beng Soon Machinery Holdings, the same cannot be said for the sale of shares. So these insider trading can help us build a thesis on the stock, but it’s also worth knowing the risks this company faces. To this end, you should inquire about the 2 warning signs we spotted with Beng Soon Machinery Holdings (including 1 which does not suit us too much).

But beware : Beng Soon Machinery Holdings may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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