Friday, August 24, 2007

Top picks - Reasonable valuations and insider buying.

So we have two companies at reasonable valuations and with strong insider buying. These are my top picks for the next year. I already hold Bright World and will place an order for Super Cofeemix when I can arrange some cash next week, if it does not rise above 0.8 SGD.

Insider buying in Singapore may not be what it seems. In her book "Show me the Money" Volume 1, Teh Hooi Ling reports ( page 117 ) that - based on a NUS honors thesis by Jaikishin " Insiders tend to conceal information laden buy trades through the use of family members or friends... Insiders also .. buy their own shares in order to support the share price. Or some of the trades were carried out to confuse the market or mask their real intentions."

I am not sure if disclosure norms have changed since that study was carried out(1990) so the results may no longer be valid. She does suggest though that significant buying by multiple insiders may be a good long term indicator.

Anyway do your own research, your investments are your responsibility alone.

1 comment:

returntomean said...

Bought Super Cofeemix at 0.79 SGD.