Read This Before Selling Hi-Tech Pipes Limited (NSE:HITECH) Shares
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we'll take a look at whether insiders have been buying or selling shares in Hi-Tech Pipes Limited (NSE:HITECH).
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, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
See our latest analysis for Hi-Tech Pipes
The Last 12 Months Of Insider Transactions At Hi-Tech Pipes
Chairman & MD Ajay Bansal made the biggest insider purchase in the last 12 months. That single transaction was for ₹6.0m worth of shares at a price of ₹198 each. We do like to see buying, but this purchase was made at well below the current price of ₹273. But because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders paid ₹13m for 58777 shares purchased. In the last twelve months Hi-Tech Pipes insiders were buying shares, but not selling. 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!
Hi-Tech Pipes is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Hi-Tech Pipes
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Hi-Tech Pipes insiders own 57% of the company, currently worth about ₹1.5b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Hi-Tech Pipes Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Hi-Tech Pipes insiders think the business has merit. Along with insider transactions, I recommend checking if Hi-Tech Pipes is growing revenue. This free chart of historic revenue and earnings should make that easy.
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 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 editorial-team@simplywallst.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.
