Should You Be Worried About Insider Transactions At Dilip Buildcon Limited (NSE:DBL)?

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 before you buy or sell Dilip Buildcon Limited (NSE:DBL), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

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.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

View our latest analysis for Dilip Buildcon

Dilip Buildcon Insider Transactions Over The Last Year

The Owner, Chairman & MD, Dilip Suryavanshi, made the biggest insider sale in the last 12 months. That single transaction was for ₹226m worth of shares at a price of ₹400 each. That means that even when the share price was below the current price of ₹432, 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. We note that the biggest single sale was only 1.0% of Dilip Suryavanshi's holding.

Insiders in Dilip Buildcon didn't buy any shares in the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Dilip Buildcon better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Dilip Buildcon insiders own about ₹42b worth of shares (which is 75% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Dilip Buildcon Insider Transactions Indicate?

The fact that there have been no Dilip Buildcon insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Dilip Buildcon insider transactions don't fill us with confidence. Of course, the future is what matters most. So if you are interested in Dilip Buildcon, you should check out this free report on analyst forecasts for the company.

But note: Dilip Buildcon 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.

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.

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