The Insider | Rarely seen share buying activity points to ‘undervaluation’ in these five companies

There were several rare insider acquisitions last week, with purchases in Pizu Group, Honma Golf, Petro-King Oilfield Services, Hopewell Holdings and YGM Trading.

Rare acquisitions, especially first-time purchases by directors since listing, are a strong sign that shares are undervalued.

On the negative side, an executive director of Tencent Holdings recorded his highest sale price since he started selling the company’s shares in 2007. This recent disposal, however, is good news for shareholders as the stock tends to rise when directors of Tencent unload shares of the company.

Chief executive Xiong Zeke recorded his first on-market trades in explosives manufacturer and blasting operations services provider Pizu since his appointment in December 2012, buying 2.24 million shares from March 31 to April 5 at 32 HK cents apiece. The trades, which accounted for 73 per cent of the stock’s trading volume, increased his holdings to 2.57 per cent of the issued capital. The purchases were made on the back of the 18 per cent rebound in the share price since March. The counter closed at 32 HK cents on Friday.

Chairman and president Liu Jianguo recorded the first on-market trades by a director in golfing equipment manufacturer Honma Golf since the stock was listed in October 2016, buying 875,000 shares from March 29 to 31 at an average of HK$6.16 apiece. The trades increased his holdings to 69.57 per cent of the issued capital. The purchases were made on the back of the 37 per cent drop in the share price since October. The chairman’s purchase prices were lower than the initial public offering prices of HK$8.46 to HK$10.98. The stock closed at HK$5.99 on Friday.