We often see insiders buying up shares in companies that perform well over the long term. 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 we'll take a look at whether insiders have been buying or selling shares in Shankara Building Products Limited (NSE:SHANKARA).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Shankara Building Products
The insider, K.G Kashinath, made the biggest insider sale in the last 12 months. That single transaction was for ₹7.1m worth of shares at a price of ₹1,185 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of ₹263. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid ₹5.8m for 17853 shares. On the other hand they divested 23451 shares, for ₹19m. Over the last year we saw more insider selling of Shankara Building Products shares, than buying. The sellers received a price of around ₹803, on average. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (₹263), so it probably doesn't tell us a lot about the value on offer today. 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!
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Shankara Building Products Insiders Bought Stock Recently
Over the last quarter, Shankara Building Products insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought ₹4.3m worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership of Shankara Building Products
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Shankara Building Products insiders own 56% of the company, currently worth about ₹3.4b 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 Do The Shankara Building Products Insider Transactions Indicate?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Shankara Building Products insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Shankara Building Products.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.