Insider Buying: The Servotech Power Systems Limited (NSE:SERVOTECH) MD & Executive Chairman Just Bought ₹149k Worth Of Shares

By
Simply Wall St
Published
November 21, 2021
NSEI:SERVOTECH
Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Raman Bhatia, the MD & Executive Chairman of Servotech Power Systems Limited (NSE:SERVOTECH) recently shelled out ₹149k to buy stock, at ₹24.75 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for Servotech Power Systems

Servotech Power Systems Insider Transactions Over The Last Year

Notably, that recent purchase by Raman Bhatia is the biggest insider purchase of Servotech Power Systems shares that we've seen in the last year. That means that even when the share price was higher than ₹24.70 (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. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Raman Bhatia. Notably Raman Bhatia was also the biggest seller.

Raman Bhatia bought 20.57k shares over the last 12 months at an average price of ₹23.93. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:SERVOTECH Insider Trading Volume November 22nd 2021

Servotech Power Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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. Servotech Power Systems insiders own 85% of the company, currently worth about ₹383m based on the recent share price. 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 Do The Servotech Power Systems Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Servotech Power Systems insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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 instance, we've identified 5 warning signs for Servotech Power Systems (2 shouldn't be ignored) you should be aware of.

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.

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