Stock Analysis

Trade Alert: The CEO, MD & Director Of Madhav Marbles and Granites Limited (NSE:MADHAV), Madhav Doshi, Has Just Spent ₹594k Buying 1.7% More Shares

Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Madhav Doshi, the CEO, MD & Director of Madhav Marbles and Granites Limited (NSE:MADHAV) recently shelled out ₹594k to buy stock, at ₹39.62 per share. Although the purchase is not a big one, increasing their shareholding by only 1.7%, it can be interpreted as a good sign.

View our latest analysis for Madhav Marbles and Granites

The Last 12 Months Of Insider Transactions At Madhav Marbles and Granites

Notably, that recent purchase by Madhav Doshi is the biggest insider purchase of Madhav Marbles and Granites shares that we've seen in the last year. That means that even when the share price was higher than ₹40.20 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Madhav Doshi was the only individual insider to buy during the last year.

Madhav Doshi bought 43.01k shares over the last 12 months at an average price of ₹41.88. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

NSEI:MADHAV Insider Trading Volume March 19th 2023

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 30% of Madhav Marbles and Granites shares, worth about ₹108m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Madhav Marbles and Granites Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Madhav Marbles and Granites insiders are well aligned, and quite possibly think the share price is too low. 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. For example, Madhav Marbles and Granites has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.

Of course Madhav Marbles and Granites may not be the best stock to buy. So you may wish to see this free collection of high quality 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 Madhav Marbles and Granites 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.

View the Free Analysis