Insiders who bought S$484.9k worth of TOTM Technologies Limited (Catalist:42F) stock in the last year have seen some of their losses recouped as the stock gained 17% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled S$264k since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.
The Non-Executive Director Tri Indrasto Dhanie made the biggest insider purchase in the last 12 months. That single transaction was for S$305k worth of shares at a price of S$0.038 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being S$0.014). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
TOTM Technologies insiders may have bought shares in the last year, but they didn't sell any. Their average price was about S$0.031. These transactions suggest that insiders have considered the current price attractive. 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!
Check out our latest analysis for TOTM Technologies
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Over the last three months, we've seen a bit of insider buying at TOTM Technologies. CEO & Executive Director Irawan Mulyadi shelled out S$41k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. TOTM Technologies insiders own 57% of the company, currently worth about S$11m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.