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 shareholders might well want to know whether insiders have been buying or selling shares in TVS Srichakra Limited (NSE:TVSSRICHAK).
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, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
TVS Srichakra Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by R. Haresh for ₹67m worth of shares, at about ₹2,220 per share. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of ₹2,256. While sellers have a variety of reasons for selling, this isn’t particularly great to see. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was only 38.8% of R. Haresh’s holding. R. Haresh was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 30.00k shares for ₹67m. But insiders sold 30.00k shares worth ₹67m. In the last twelve months there was more buying than selling by TVS Srichakra insiders. Their average price was about ₹2,230. Although they bought at below the recent price of ₹2,256 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
TVS Srichakra is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Have TVS Srichakra Insiders Traded Recently?
In the last three months, insiders bought ₹67m. That’s only a tiny bit more than the sales, worth ₹67m. Looking at the net result, we don’t think these recent trades shed much light on how insiders, as a group, are feeling about the company’s prospects.
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. TVS Srichakra insiders own about ₹1.8b worth of shares. That equates to 10% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At TVS Srichakra Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest TVS Srichakra insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course TVS Srichakra 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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