Despite Enviro Infra Engineers' Pullback, Insiders Still Gained ₹3.6m

Enviro Infra Engineers Limited (NSE:EIEL) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 10% decline in the stock price. Even after accounting for the recent loss, the ₹23.3m worth of stock purchased by them is now worth ₹26.9m or in other words, their investment continues to give good returns.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Enviro Infra Engineers Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman & Whole-Time Director Sanjay Jain bought ₹23m worth of shares at a price of ₹200 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹226. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

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!

Check out our latest analysis for Enviro Infra Engineers

Enviro Infra Engineers is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Enviro Infra Engineers insiders own about ₹28b worth of shares (which is 72% 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 Does This Data Suggest About Enviro Infra Engineers Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Enviro Infra Engineers insiders think the business has merit. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for Enviro Infra Engineers you should know about.

But note: Enviro Infra Engineers 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.