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 before you buy or sell Jubilant Life Sciences Limited (NSE:JUBILANT), you may well want to know whether insiders have been buying or selling.
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 in the company. 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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Jubilant Life Sciences
In the last twelve months, the biggest single sale by an insider was when the insider, Renu Khanna, sold ₹5.2m worth of shares at a price of ₹865 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹402. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Jubilant Life Sciences shares, than buying. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Jubilant Life Sciences Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Jubilant Life Sciences. Shyamsundar Bang spent ₹10m on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Does Jubilant Life Sciences Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 3.2% of Jubilant Life Sciences shares, worth about ₹2.1b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Jubilant Life Sciences Insiders?
It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Jubilant Life Sciences 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 Jubilant Life Sciences.
Of course Jubilant Life Sciences may not be the best stock to buy. So you may wish to see this free collection of high quality 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.