Have Insiders Been Buying Aditya Birla Capital Limited (NSE:ABCAPITAL) Shares This Year?

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 shareholders might well want to know whether insiders have been buying or selling shares in Aditya Birla Capital Limited (NSE:ABCAPITAL).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.

View our latest analysis for Aditya Birla Capital

Aditya Birla Capital Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Krishna Maheshwari, sold ₹9.0m worth of shares at a price of ₹59.97 per share. That means that even when the share price was below the current price of ₹70.35, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 47% of Krishna Maheshwari's holding.

In the last twelve months insiders purchased 228.46k shares for ₹13m. On the other hand they divested 191.50k shares, for ₹12m. Overall, Aditya Birla Capital insiders were net buyers during the last year. You can see the insider transactions (by companies and 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!

Aditya Birla Capital 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.

Aditya Birla Capital Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Aditya Birla Capital. In total, insider Krishna Maheshwari sold ₹10m worth of shares in that time. Meanwhile Chief Operating Officer Mukesh Malik bought ₹1.8m worth. Generally this level of net selling might be considered a bit bearish.

Does Aditya Birla Capital Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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. Our data indicates that Aditya Birla Capital insiders own about ₹594m worth of shares (which is 0.3% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Aditya Birla Capital Insiders?

Unfortunately, there has been more insider selling of Aditya Birla Capital stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Aditya Birla Capital is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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