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We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in Opto Circuits (India) Limited (NSE:OPTOCIRCUI).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. 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.'

See our latest analysis for Opto Circuits (India)

Opto Circuits (India) Insider Transactions Over The Last Year

There wasn't any very large single transaction over the last year, but we can still observe some trading.

Over the last year, we can see that insiders have bought 405k shares worth ₹2.3m. But insiders sold 125k shares worth ₹1.0m. In total, Opto Circuits (India) insiders bought more than they sold over the last year. Their average price was about ₹5.68. I'd consider this a positive as it suggests insiders see value at around the current price, which is ₹5.00. 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!

Opto Circuits (India) is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Opto Circuits (India) Insiders Bought Stock Recently

We saw some Opto Circuits (India) insider buying shares in the last three months. They bought ₹2.3m worth in that time. On the other hand, they sold ₹381k worth of shares. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.

Insider Ownership of Opto Circuits (India)

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Opto Circuits (India) insiders own about ₹503m worth of shares. That equates to 34% 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.

So What Does This Data Suggest About Opto Circuits (India) Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Opto Circuits (India). That's what I like to see! To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

But note: Opto Circuits (India) may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.