Occasionally, I would like to look at insider or share buybacks to see if I am lucky to spot any hidden gems. In fact, this is also one of the more commonly used strategies by investors. Why is that so?<\/p>\n
As the legendary Fund manager Peter Lynch once said,<\/p>\n
“Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.\u201d<\/em><\/p>\n In short, a company\u2019s management would only purchase the stock or initiate share buybacks when they perceive that the stock is undervalued<\/em><\/strong>. Hence, it makes sense for investors (like You and Me) to do some further research to see if the stock is really a bargain per se.<\/p>\n With these in mind, let\u2019s zoom into 2 interesting companies I\u2019ve cherry picked which have recently seen insider purchases or substantial shareholder purchases.<\/p>\n Commodities trader Noble Group Limited probably needs no introduction. At one point, it was a blue chip deemed as too cheap and a bargain. The next moment, it was dropped<\/a> from the STI Index and the share price went crashing down >50%.<\/p>\n Since then, Noble has been fighting to prop up its finances and even issued a 1-for-1 rights issue in August 2016. Fortunately, it seems that Noble Group has gotten its lucky break.<\/p>\n On 14th<\/sup> February 2017, Noble Group issued a statement<\/a> that it is currently engaged in discussions regarding a strategic investment in the firm. According to Bloomberg<\/a>, people familiar with the talks has identified the other party as China\u2019s Sinochem Group<\/strong>.<\/p>\n It seems Eastspring Investments, an investment arm of Prudential plc<\/strong> (LON:PRU), has gotten wind of the news earlier. It has gobbled up 29.037 million shares<\/u><\/em> at an average price of S$0.1788<\/u><\/em>. With that, its substantial stake in Noble Group shot up from 9.839% to 10.061%.<\/p>\n In case you are wondering why Noble Group\u2019s share price has hiked up >20% in the past week, you got your answer there. I believed that many traders have hopped on the trend noticing that there is a big player in the field supporting the price gains.<\/p>\n Noble Group\u2019s share price closed at S$0.225 on Friday. It is currently loss-making and does not offer any dividend yield.<\/p>\n\n
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