Importance of share buyback (company or director)
VS, Liihen, Topglove.. - lesson I learned (share acquisition - director/company)
How to spot an undervalued gem in stock market? This is a very interesting question. One famous example is VS industry berhad. Look at the annoucement made by VS starting from 18 July 2014, its directors keep buying back VS shares through ESOS and open market.
What is this action of acquisition of shares telling us? I believe this is a very important signal, either company share buyback or director acquisition of shares, telling us that the shares are largely undervalued! If you calculate the growth rate of the price of VS until today, I'm sure you will convince that this is true.
Let's review some of the winners:
- VS: Directors keep acquiring since 18 July 2014, company buying back since 9 Oct 2014
- Liihen: Directors keep acquiring since 28 Feb 2014
- Texchem: Directors keep acquiring since 3 Sep 2015, company buying back since 27 Nov 2015
- Gtronic: Directors keep acquiring since 28 Mar 2001
- Topglov: Directors keep acquiring since 23 Jun 2015
- LBS: Directors keep acquiring since 18 Dec 2015, company buying back since 26 Mar 2015
- IGB: Directors keep acquiring since 25 Aug 2015
Discussions
2 people like this. Showing 27 of 27 comments
http://www.bursamalaysia.com/market/listed-companies/company-announcements/#/?category=SB&sub_category=all&alphabetical=All
If I was to put position on every shares buy back it will be too many
Obviously it is not a good decision
2016-01-18 17:50
PlsGiveBonus: Of course you can't split your money into all of them, but focus perhaps 2 or 3 only...
2016-01-18 17:54
That's true. I like your strategy. But it's not so good of a predictor when it comes to company share buy backs though.
2016-01-18 18:19
I think you are forcing yourself to find a cause (director buying shares) to explain an effect (stocks undervalued).
I will give you one to disprove your theory. NiHsin buy back 15 million of their own shares over the past 10 years, too bad the share price is still the same since 10 years ago.
Director buyback is just a positive sign, nothing more nothing less.
2016-01-18 19:56
Yeo: Of course this strategy is not 100% success proof, it is just one of the ways to minimize risks.
2016-01-18 20:22
Again it depends how you define risk, if a director keep buying shares and he plans to reap his reward 20 years later. On the other hand your own time frame is to make money in a year, your risk is 20x larger than his. He can sustain 19 years of losing money and make money on the 20th year but you can't
2016-01-19 04:15
Bornoil is interesting........owners bot a lot of warrants & converted them last year.
waiting for a breakout
2016-01-19 10:17
What about Granflo, the director buying their own share ? Is this a sign?
2016-01-19 10:50
I agree with Spaghetti. I have been monitoring Sam for sometime. Watch the push. Once it starts, usually gap up 1.00. 8.00 by CNY.
2016-01-19 19:26
Normally director buy shares and keep it for long term. If you are not going to hold for a period of time, it's better not to follow.
2016-01-19 22:11
have you seen directors disposing shares yet the share price went up? flbhd is the example haha
2016-01-20 00:22
sorry im newbie here.. how & where to know director keep doing share buy back.
2016-01-26 15:41
rohayu888888: http://www.bursamalaysia.com/market/listed-companies/company-announcements/#/?category=SH&sub_category=SH1&alphabetical=All
2016-01-26 15:48
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Bornoil will be one of the next catalysts I reckon
2016-01-18 17:15