I first bought shares of SGFI nearly a year ago at around 70 cents. Of course, at that time, I didn't think (perhaps rather naively, since I only started doing this full time around that time) risks of fraud could be such a problem. But now after paying "school fees" for my mistakes, I have become a little wiser. So yes, if SGFI's clean as a whistle, 50 cents is definitely a steal. But that's a big "if". Hope I've answered your question.
Mel wrote: sykn, I can understand yr prudence. Would you buy back at a much lower level? Wht is it? In the event that Sino Grandness is clean as a whistle, the share price is really a bargain at about 3.5X.
In my opinion, the CEO buying more shares does not give me much reassurance. His statement about how they have been audited and hence we should trust him is a potential red flag. Trust is earned and not asked for.
Over the last two days, 22nd and 23rd Oct, the CEO purchased a total of 1.4 million shares. If he is not confident of the company, you think he would throw good money after bad? Moreover I think his stake of 40.37% should make him the largest shareholder, so if anything go wrong with the company, he stand to loose the most!
Of course SSH buying shares can indicate his faith in the company. However, it does not necessarily mean that as well. We still have to assess the situation and the company. I have past experience with Quindell, a company that was said to be a fraud by a blogger. Stock price dropped 50%, backed by large reputable funds like Fidelity and CEO constantly buying back shares during that period the price still continued dropping. Essentially, my point is don't base your judgement solely on CEO buying back shares as he may have other intentions.
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