The stock market has been tanking and it is still down more than 20% for the year despite rebounding strongly last week. Investors are clamouring for views and directions in this volatile period. How about finding out what the tycoons and insiders are up to thus far?
We often would rely on the media to get access to these rich leaders. But it isn’t as useful interpreting what they say during interviews as they tend to be politically correct with their views. It is always better to watch what they do with their money. As the saying goes, action speaks louder than words.
Research has shown that insider buying is one of the signals of a stock outperformance. And in case you get confused between insider buying and share buybacks, here is a quick video explainer:
I have looked at some insiders who have bought stocks during the market turmoil in Mar 2020.
Before we proceed, I want to lay out some important details that shaped this insider buying report
- Period covers Mar 2020.
- This is not an exhaustive list and there were more insider buying in other companies than what was shown here. There were simply too many companies to cover and I chose the more prominent ones, subjectively.
- I will only present the most well-known individual in each company even though he may not be the one who actually bought the shares. He might have increased his deemed interest because his related family members and companies have bought the shares.
- For cases where the buy price was not reported, I took the closing price for the day as the buy price.
- Insider buying was most active among property-related stocks.
Wee Cho Yaw added 0.4% stake in UOL worth $32,511,310
Wee Cho Yaw is the Chairman Emeritus of UOB and the 5th richest man in Singapore with US$5.2b according to Forbes.
UOL is a leading property company and a component stock in the STI. It has many valuable properties such as Novena Square and owns brands like Pan Pacific and Park Royal via its subsidiary.
- Total value bought = $32,551,310
- Average price of $6.55
- Added 0.42% stake to 37.45%
Wee Cho Yaw added 0.58% stake in Haw Par worth $13,778,771
Haw Par owns the Tiger Balm brand and has a property arm. It also runs the Underwater World in Singapore, China, Thailand and Spain.
- Total value bought = $13,778,771
- Average price of $10.59
- Added 0.58% stake to 36.23%
Wee Cho Yaw added 0.23% stake in UIC worth $6,598,948
UIC is a property company and a subsidiary of UOL. Some of the properties in their portfolio includes SGX Centre, Singapore Land Tower and Marina Square.
- Total value bought = $6,598,948
- Average price of $1.97
- Added 0.23% stake to 50.37%
Wee Ee Chao added 0.29% stake in UOB Kay Hian worth $2,737,532
UOB Kay Hian is one of the largest stock brokerage firms in Singapore. Wee Ee Chao is the managing director of UOB Kay Hian and he is the son of Wee Cho Yaw.
- Total value bought = $2,737,532
- Average price of $1.15
- Added 0.29% to 29.85%
Wee Ee Chao bought UOB Kay Hian stock during every trading day in Mar 2020 thus far. Too many transactions to fit in a chart so here’s a table instead:
Chua Thian Poh added 0.12% stake in Ho Bee worth $1,765,560
Chua Thian Poh is the 31st richest in Singapore with a net worth of US$1.1 billion, according to Forbes.
Ho Bee has developed multiple residential properties in Sentosa Cove and holds The Metropolis at Buona Vista as an investment property.
- Total value bought = $1,764,560
- Average price of $1.93
- Added 0.12% to 75.20%
Zhong Sheng Jian added 0.003% stake in Yanlord worth $625,950
Zhong Sheng Jian is the 25th richest man in Singapore with US$1.2b according to Forbes.
Yanlord is a property developer with numerous projects in affluent cities like Shanghai and Nanjing.
- Total value bought = $625,950
- Average price of $1.03
- Added 0.003% stake to 70.353%
Ong Pang Aik added 0.68% stake in Lian Beng worth $1,443,540
Ong Pang Aik is the chairman and managing director of Lian Beng.
Lian Beng is one of the leading construction companies in Singapore. The company is an A1 grade contractor in General Building and has an A2 grade in Civil Engineering. These two grades allow Lian Beng to tender for public-sector building projects of unlimited contract value and to handle engineering projects of up to $85 million in contract value.
- Total value bought = $1,443,450
- Average price $0.68
- Added 0.68% to 36.58%
Ong Pang Aik has started buying Lian Beng stocks at the start of Feb 2020. He was quite prolific and too many transactions to capture in a chart, so here’s a table:
Xu Rongcan added 0.04% stake in Sasseur REIT worth $1,877,970
Xu Rongcan is the founder of Sasseur REIT’s sponsor and Sasseur REIT owns four outlet malls in China.
- Total value bought = $1,877,970
- Average price of $0.71
- Added 0.04% stake to 57.67%
Ismail Gafoor added 0.15% stake in PropNex worth $307,697
Ismail Gafoor is the Executive Chairman and CEO of PropNex. PropNex is the largest real estate agency in Singapore.
- Total value bought = $307,697
- Average price of $0.51
- Added 0.15% stake to 64.57%
Anthoni Salim added 0.12% stake in Indofood Agri worth $3,973,400
Anthoni Salim and his family are the sixth richest in Indonesia with US$5.5b net worth, according to Forbes. Indofood Agri is a vertically integrated agribusiness, from cultivating palm oil plants to producing edible oil.
- Total value bought =$3,973,400
- Average price of $0.28
- Added 0.12% stake to 82.15%
Loo Choon Yong added 0.28% stake in Raffles Medical worth $4,312,593
Dr Loo Choon Yong is the 45th richest in Singapore with US$695m net worth, according to Forbes. He co-founded Raffles Medical and he is currently serving as the executive chairman. Raffles Medical is an integrated healthcare provider in Singapore, China, Japan, Vietnam and Cambodia.
- Total value bought = $4,312,593
- Average price of $0.81
- Added 0.28% stake to 51.99%
Lim Hock Chee added 0.04% in Sheng Siong worth $517,920
Lim Hock Chee is the 39th richest in Singapore with a net worth of US$870m, according to Forbes. He is currently serving as the CEO in Sheng Siong and he runs the company together with two other brothers. Sheng Siong is the third largest supermarket chain in Singapore.
- Total value bought = $517,920
- Average price of $1.09
- Added 0.04% stake to 57.47%
Lim Chung Chun added 0.083% in iFAST worth $342,615
Lim Chung Chun is the chairman and CEO of iFAST. He co-founded Fundsupermart in 2000 to enable retail investors to buy and sell unit trusts online conveniently. Today, iFAST offers a suite of financial products to both B2B and B2C customers.
- Total value bought = $342,615
- Average price of $0.85
- Added 0.083% stake to 22.38%
Insiders are buying more stocks as the market tanks. Their average buy price would indicate some undervaluation exists, and it is a strong signal since the insiders are taking money out of their own pockets to buy.
I have noticed that most of the insider buying revolves around property stocks. Probably it is a good sector for us to look at since so many of them believe that their share prices are worth more, and they are definitely positive about the future.
That said, insiders may have other objectives other than investment returns. Sometimes they may buy more shares with the purpose of increasing their stake for greater control of the company. Hence, the insider buying may not necessary indicate a better company performance in the future.
While statistics have shown that stocks with insider buying tend to do better, it isn’t useful if we don’t buy enough of these stocks to be statistically significant. If you choose to buy fewer stocks like a sniper, you would need to analyse more aspects before making a decision.
CEO of Dr Wealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors. Conducts the flagship Intelligent Investor Immersive program under Dr Wealth. An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio. Featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.