Stock Analysis

The Hi-Tech Gears Limited (NSE:HITECHGEAR) insiders are still down ₹7.7m after purchasing last year, recent gain helped regain some losses

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NSEI:HITECHGEAR
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Insiders who purchased ₹17m worth of The Hi-Tech Gears Limited (NSE:HITECHGEAR) shares over the past year recouped some of their losses after price gained 12% last week. However, total losses seen by insiders are still ₹7.7m but in since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Our analysis indicates that HITECHGEAR is potentially overvalued!

Hi-Tech Gears Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Aabha Kapuria bought ₹9.6m worth of shares at a price of ₹17,823 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being ₹288). 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 Hi-Tech Gears insiders were buying shares, but not selling. The average buy price was around ₹514. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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NSEI:HITECHGEAR Insider Trading Volume December 6th 2022

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.

Does Hi-Tech Gears 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Hi-Tech Gears insiders own 49% of the company, worth about ₹2.6b. 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 Does This Data Suggest About Hi-Tech Gears Insiders?

It doesn't really mean much that no insider has traded Hi-Tech Gears shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Hi-Tech Gears insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 5 warning signs for Hi-Tech Gears (2 are a bit unpleasant) you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Valuation is complex, but we're helping make it simple.

Find out whether Hi-Tech Gears is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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