Strong insider buying of AirAsia, Sunway REIT, FGVH and Gamuda shares

A nice and meaningful piece of news to ponder when the anoucement of coming election getting close!

Strong insider buying of AirAsia, Sunway REIT, FGVH and Gamuda shares


By CHOONG EN HAN 27/11/2012

han@thestar.com.my

PETALING JAYA: Blue chips are back on the radar with the management of some of these companies buying up their own shares.

In a market strategy report by Credit Suisse, analyst Tan Ting Min said there were some fresh insider buying in Gamuda Bhd, AirAsia Bhd, Sunway Real Estate Investment Trust, Felda Global Ventures Holdings Bhd (FGVH) and Wilmar International Ltd.

“Strong insider buying is usually perceived as a buy' signal for these stocks. Among our coverage, we would highlight Gamuda and AirAsia as undervalued, ” she said.

She noted that despite Gamuda's growing orderbook, its stock price had been hampered by election fears. She said managing director Datuk Lin Yun Ling accumulated 32.9 million Gamuda shares at an average price of RM3.54 (against current price of RM3.66), doubling the stake in the company from 1.7% to 3.3%.
She said since early September, Tan Sri Tony Fernandes and Datuk Kamarudin Meranun together have accumulated 51.8 million shares in AirAsia at an average price of RM2.93 (against current price of RM2.86) while its director Conor McCarthy bought 500,000 shares at RM2.94.
“Following Lion Corp's announcement that it will set up operations in Malaysia (via Malindo Air), AirAsia's stock price fell by 13%,” she said.
Another analyst said although this might be a signal to buy, one have to bear in mind that these insiders have a much lower cost of investment over the years, despite them buying up substantial volume of shares at this point.
“Some of these stocks have dropped to a certain level that offers value, and these insiders might see it as a comfortable entry point to increase their stake.
“One must remember they are strategic shareholders of the company, and they are in it for the long term of maybe five to 10 years,” he said. In the same Credit Suisse report, Tan said Felda bought an additional 3.15 million shares in FGV on Oct 8, adding that its current share price of RM4.66 was barely above its initial public offering price of RM4.55 and 15% below its peak of RM5.50 on July 11.

“We rate FGV an underperform due to its rich valuations and old age profile,” Tan said.
Sunway Real Estate Investment Trust (REIT) has also drawn its chairman Tan Sri Jeffrey Cheah's buying interest as well. She said Cheah bought 20.4 million shares of Sunway REIT on Nov 1 and Nov 2 at an average price of RM1.53 while the current price was RM1.47.