It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in The Hi-Tech Gears Limited (NSE:HITECHGEAR).
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, such insiders must disclose their trading activities, and not trade on inside information.
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 Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Hi-Tech Gears Insider Transactions Over The Last Year
While there weren’t any large insider transactions in the last twelve months, it’s still worth looking at the trading.
In the last twelve months Hi-Tech Gears insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Hi-Tech Gears 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.
Insiders at Hi-Tech Gears Have Bought Stock Recently
Over the last quarter, Hi-Tech Gears insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought ₹4.2m worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership of Hi-Tech Gears
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Hi-Tech Gears insiders own about ₹1.8b worth of shares (which is 60% 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 Hi-Tech Gears Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Hi-Tech Gears. One for the watchlist, at least! Along with insider transactions, I recommend checking if Hi-Tech Gears is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Hi-Tech Gears may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 email@example.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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