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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Noel Gifts International Ltd (SGX:543).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

See our latest analysis for Noel Gifts International

Noel Gifts International Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder Siu Hong Wong for S$150k worth of shares, at about S$0.30 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price. The only individual insider to buy over the last year was Siu Hong Wong.

Siu Hong Wong bought a total of 814.60k shares over the year at an average price of S$0.27. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Noel Gifts International insiders own 70% of the company, worth about S$16m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Noel Gifts International Insider Transactions Indicate?

We can’t make any useful conclusions about recent trading, since insider buying and selling has been balanced. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Noel Gifts International insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

But note: Noel Gifts International 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.