Are Insiders Selling Avadh Sugar & Energy Limited (NSE:AVADHSUGAR) Stock?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Avadh Sugar & Energy Limited (NSE:AVADHSUGAR).

What Is Insider Buying?

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, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. 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'.

View our latest analysis for Avadh Sugar & Energy

Avadh Sugar & Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Chairperson, Nandini Nopany, for ₹128m worth of shares, at about ₹256 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 ₹188. So it may not shed much light on insider confidence at current levels. Nandini Nopany was the only individual insider to sell over the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Avadh Sugar & Energy Boast High Insider Ownership?

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. Our data indicates that Avadh Sugar & Energy insiders own about ₹518m worth of shares (which is 14% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Avadh Sugar & Energy Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Avadh Sugar & Energy shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Avadh Sugar & Energy insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Avadh Sugar & Energy. To help with this, we've discovered 5 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Avadh Sugar & Energy.

But note: Avadh Sugar & Energy 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 currently account for open market transactions and private dispositions, but not derivative transactions.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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