We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Airan Limited (NSE:AIRAN), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Airan Insider Transactions Over The Last Year
There wasn't any very large single transaction over the last year, but we can still observe some trading.
Sudeep Agrawal sold a total of 5823 shares over the year at an average price of ₹17.89. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Airan better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Are Airan Insiders Buying Or Selling?
In the last three months, insiders sold ₹104k. That's only a tiny bit more than the purchases, worth ₹14k. Looking at the net result, we don't think this recent trading sheds much light on how insiders, as a group, are feeling about the company's prospects.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Airan insiders own 44% of the company, currently worth about ₹773m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Airan Insiders?
Unfortunately, there has been more insider selling of Airan stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Airan is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.