Elecon Engineering Insiders Placed Bullish Bets Worth ₹106.6m

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Elecon Engineering Company Limited (NSE:ELECON), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Elecon Engineering

The Last 12 Months Of Insider Transactions At Elecon Engineering

Over the last year, we can see that the biggest insider purchase was by insider Nehal Patel for ₹35m worth of shares, at about ₹586 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹1,060. 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.

Elecon Engineering insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around ₹661. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

Elecon Engineering 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 Elecon Engineering Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Elecon Engineering insiders own about ₹9.5b worth of shares (which is 7.9% 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 Does This Data Suggest About Elecon Engineering Insiders?

It doesn't really mean much that no insider has traded Elecon Engineering shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Elecon Engineering insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Elecon Engineering. At Simply Wall St, we found 1 warning sign for Elecon Engineering that deserve your attention before buying any shares.

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 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.