It is not uncommon to see companies perform well in the years after insiders buy shares. 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 UltraTech Cement Limited (NSE:ULTRACEMCO).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At UltraTech Cement
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
Over the last year, we note insiders sold 1.26k shares worth ₹5.1m. All up, insiders sold more shares in UltraTech Cement than they bought, over the last year. The average sell price was around ₹4,051. It’s not ideal to see that insiders have sold at around the current price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at UltraTech Cement Have Sold Stock Recently
Over the last three months, we’ve seen a bit of insider selling at UltraTech Cement. Harendra Singh divested only ₹2.4m worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn’t enough for us to put any weight on it.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.06% of UltraTech Cement shares, worth about ₹664m, according to our data. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Do The UltraTech Cement Insider Transactions Indicate?
An insider sold UltraTech Cement shares recently, but they didn’t buy any. And there weren’t any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in UltraTech Cement, you should check out this free report on analyst forecasts for the company.
Of course UltraTech Cement may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.