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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 we’ll take a look at whether insiders have been buying or selling shares in PNB Housing Finance Limited (NSE:PNBHOUSING).
What Is Insider Buying?
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 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.’
PNB Housing Finance Insider Transactions Over The Last Year
MD & Director Sanjaya Gupta made the biggest insider sale in the last 12 months. That single transaction was for ₹95m worth of shares at a price of ₹1,315 each. That is hardly a positive sign, even though it took place above the latest price (₹922). So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders purchased 2.50k shares for ₹3.4m. But they sold 294.80k for ₹350m. Over the last year we saw more insider selling of PNB Housing Finance shares, than buying. The average sell price was around ₹1,187. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of ₹922. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like PNB Housing Finance better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at PNB Housing Finance Have Sold Stock Recently
The last quarter saw substantial insider selling of PNB Housing Finance shares. Specifically, insiders ditched ₹27m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of PNB Housing Finance
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. PNB Housing Finance insiders own about ₹917m worth of shares. That equates to 0.6% 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.
So What Do The PNB Housing Finance Insider Transactions Indicate?
Insiders sold stock recently, but they haven’t been buying. And our longer term analysis of insider transactions didn’t bring confidence, either. But since PNB Housing Finance is profitable and growing, we’re not too worried by this. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.