Even if it’s not a huge purchase, we think it was good to see that Davuluri Rama Rao, the Chairman of Neuland Laboratories Limited (NSE:NEULANDLAB) recently shelled out ₹7.5m to buy stock, at ₹297 per share. However, we do note that it only increased their holding by 0.7%, and it wasn’t a huge purchase by absolute value, either.
The Last 12 Months Of Insider Transactions At Neuland Laboratories
Notably, that recent purchase by Davuluri Rama Rao is the biggest insider purchase of Neuland Laboratories shares that we’ve seen in the last year. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being ₹276). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Neuland Laboratories insiders were buying shares, but not selling. 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!
Neuland Laboratories 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.
Does Neuland Laboratories Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Neuland Laboratories insiders own about ₹1.4b worth of shares. That equates to 38% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Neuland Laboratories Tell Us?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Neuland Laboratories insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. To assist with this, we’ve discovered 3 warning signs that you should run your eye over to get a better picture of Neuland Laboratories.
But note: Neuland Laboratories 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 firstname.lastname@example.org. 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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