Read This Before Selling Ashoka Buildcon Limited (NSE:ASHOKA) Shares

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Ashoka Buildcon Limited (NSE:ASHOKA), you may well want to know whether insiders have been buying or selling.

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, 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 it is perfectly logical to keep tabs on what insiders are doing. 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'.

Check out our latest analysis for Ashoka Buildcon

The Last 12 Months Of Insider Transactions At Ashoka Buildcon

In the last twelve months, the biggest single purchase by an insider was when Non-Executive & Non-Independent Director Ashish Kataria bought ₹6.9m worth of shares at a price of ₹63.03 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹112. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Ashish Kataria bought a total of 470.54k shares over the year at an average price of ₹50.66. You can see a visual depiction of insider transactions (by companies and 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!

Ashoka Buildcon 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.

Are Ashoka Buildcon Insiders Buying Or Selling?

Over the last three months, we've seen a bit of insider buying at Ashoka Buildcon. Non-Executive & Non-Independent Director Ashish Kataria bought ₹2.1m worth of shares in that time. But Non-Executive & Non-Independent Director Ashish Kataria sold ₹1.5m worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

Does Ashoka Buildcon Boast High 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. Ashoka Buildcon insiders own about ₹17b worth of shares (which is 53% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Ashoka Buildcon Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Ashoka Buildcon. 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. Be aware that Ashoka Buildcon is showing 3 warning signs in our investment analysis, and 2 of those make us uncomfortable...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

When trading Ashoka Buildcon or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.