Buying activity recorded by three directors with solid track records
Insider buying activity seen in Tech Pro Technology, Le Saunda Holdings and Sun Hung Kai Properties
The director activity rose based on filings on the Exchange from June 13 to 17 with 52 companies that recorded 252 purchases worth HK$266 million versus 12 firms with 64 disposals worth HK$79 million. The buy figures were sharply up from the previous week’s four-day totals of 29 companies, 142 purchases and HK$153 million. On the selling side, the number of firms was unchanged while the number of trades and value were slightly up from the previous week’s 43 disposals worth HK$48 million.
Meanwhile, buyback activity surged for the second straight week with 27 companies that posted 142 repurchases worth HK$460 million. The figures were sharply up from the previous week’s 17 firms, 71 trades and HK$165 million.
With the surge in buying, the bulk of the significant trades were purchases last week with acquisitions in Tech Pro Technology, Le Saunda Holdings and Sun Hung Kai Properties. Even more significant, the directors that bought shares in these stocks have good trading histories.
Chairman Li Wing Sang resumed buying shares of aluminium electrolytic capacitors manufacturer Tech Pro Technology after the stock rebounded by 13 per cent from HK$2.24 on May 31 with 3 million shares purchased on June 15 at HK$2.52 each. The trade increased his holdings to 1.237 billion shares or 18.94 per cent of the issued capital. Despite the rebound in the share price, the counter is still down since the first week of May from HK$2.75. He previously acquired 7.6 million shares from January 4 to April 15 at HK$1.70 to HK$2.49 each or an average of HK$2.37 each. Prior to his trades this year, the chairman acquired 161 million shares from January to December 2015 at HK$1.50 to HK$2.04 each or an average of HK$1.73 each and 513 million shares from November 2011 to December 2014 at 52 HK cents to HK$1.66 each or an average of 91 HK cents each. Investors should note that the stock rose by an average of 7 per cent three months after the chairman bought shares based on 234 purchases since 2011. The stock recorded a price gain three months after on 86 per cent of those acquisitions. The stock closed at HK$2.60 on Friday.
Founder and Non-Executive Director Marces Lee Tze Bun bought shares of shoe retailer and manufacturer Le Saunda Holdings at sharply below his sale price in the second quarter of 2015 with 4.2 million shares purchased from June 7 to 13 at HK$1.62 each. The trades, which accounted for 82 per cent of the stock’s trading volume, increased his holdings to 363.069 million shares or 51.43 per cent of the issued capital. The purchases were made on the back of a 51 per cent drop in the share price since May 2015 from HK$3.28. He previously sold 684,000 shares from May to June 2015 at an average of HK$3.89 each. Prior to those sales, Mr. Lee acquired 32 million shares from June 2004 to June 2012 at 50 HK cents to HK$4.00 each or an average of HK$1.41 each. Several factors make this recent purchase worth noting. The acquisition was made at far below Mr. Lee’s sale price which is a strong sign that the shares are undervalued. Secondly, the founder’s purchase this month is a very rare transaction with his previous buy in 2012. Lastly, the stock tends to rise whenever the founder buys shares with the counter rising by an average of 20 per cent six months after he bought shares based on 172 purchases since 1995. The stock recorded a price gain six months after on 62 per cent of those acquisitions. The counter closed at HK$1.62 on Friday.
Chairman Raymond Kwok Ping Luen resumed buying shares of blue chip property developer Sun Hung Kai Properties after the stock fell by 9 per cent from HK$99.10 in the last week of April with 417,000 shares purchased on June 13 at HK$90.02 each. The trade increased his holdings to 508.605 million shares or 17.57 per cent of the issued capital. He previously acquired 6.04 million shares from January 4 to 26 at HK$91.95 to HK$80.60 each or an average of HK$86.60 each. The acquisition this month is not unusual as the chairman’s purchases in January were made after the stock fell by as much as 16 per cent from HK$95.85 on December 23, 2015. Prior to his trades this year, the chairman acquired 5.44 million shares from September to December 2015 at an average of HK$97.93 each and 14.1 million shares from June 2013 to March 2014 at an average of HK$95.99 each. Investors should note that the stock rose by an average of 6 per cent three months after the chairman bought shares based on 183 purchases since 2013. The stock recorded a price gain three months after on 81 per cent of those acquisitions. The stock closed at HK$87.35 on Friday.
Robert Halili is the managing director of Asia Insider