We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Mahamaya Steel Industries Limited (NSE:MAHASTEEL).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
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The Last 12 Months Of Insider Transactions At Mahamaya Steel Industries
In the last twelve months, the biggest single sale by an insider was when the , Ramanand Agrawal, sold ₹3.8m worth of shares at a price of ₹192 per share. So we know that an insider sold shares at around the present share price of ₹179. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Ramanand Agrawal was the only individual insider to sell over the last year.
The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Mahamaya Steel Industries insiders own about ₹1.9b worth of shares (which is 77% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Mahamaya Steel Industries Insiders?
An insider hasn't bought Mahamaya Steel Industries stock in the last three months, but there was some selling. And even if we look to the last year, we didn't see any purchases. But it is good to see that Mahamaya Steel Industries is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 .
Of course Mahamaya Steel Industries may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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