33% Of This Info-Tech Systems Insider's Holdings Were Sold
Insiders were net sellers of Info-Tech Systems Ltd.'s (SGX:ITS ) stock during the past year. That is, insiders sold more stock than they bought.
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.
Info-Tech Systems Insider Transactions Over The Last Year
The Co-Founder & Executive Chairman, Kim Heng Lee, made the biggest insider sale in the last 12 months. That single transaction was for S$23m worth of shares at a price of S$0.94 each. That means that even when the share price was below the current price of S$0.98, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 33% of Kim Heng Lee's holding. Kim Heng Lee was the only individual insider to sell shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for Info-Tech Systems
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).
Info-Tech Systems Insiders Are Selling The Stock
The last three months saw significant insider selling at Info-Tech Systems. In total, Co-Founder & Executive Chairman Kim Heng Lee sold S$23m 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
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Info-Tech Systems insiders own about S$164m worth of shares (which is 65% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Info-Tech Systems Insiders?
An insider sold Info-Tech Systems shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Info-Tech Systems is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Info-Tech Systems. At Simply Wall St, we found 1 warning sign for Info-Tech Systems that deserve your attention before buying any shares.
But note: Info-Tech Systems 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.