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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Keppel Corporation Limited (SGX:BN4), that sends out a positive message to the company's shareholders.
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.
View our latest analysis for Keppel
The Last 12 Months Of Insider Transactions At Keppel
The Non-Executive & Non-Independent Chairman Leong Kay Teoh made the biggest insider purchase in the last 12 months. That single transaction was for S$171k worth of shares at a price of S$6.83 each. That means that even when the share price was higher than S$5.40 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Keppel insiders may have bought shares in the last year, but they didn't sell any. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Keppel Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Keppel insiders own about S$59m worth of shares. That equates to 0.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Keppel Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Keppel shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Keppel insiders are doubting the company, and they do own shares. 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. For example, Keppel has 3 warning signs (and 1 which is significant) we think you should know about.