How Many Somany Ceramics Limited (NSE:SOMANYCERA) Shares Did Insiders Buy, In The Last Year?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Somany Ceramics Limited (NSE:SOMANYCERA).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

See our latest analysis for Somany Ceramics

The Last 12 Months Of Insider Transactions At Somany Ceramics

The Chairman & MD Shreekant Somany made the biggest insider purchase in the last 12 months. That single transaction was for ₹34m worth of shares at a price of ₹172 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹225. 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.

While Somany Ceramics insiders bought shares during the last year, they didn't sell. 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!

Somany Ceramics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Somany Ceramics Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Somany Ceramics. Not only was there no selling that we can see, but they collectively bought ₹45m worth of shares. That shows some optimism about the company's future.

Insider Ownership of Somany Ceramics

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Somany Ceramics insiders own 17% of the company, worth about ₹1.6b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Somany Ceramics Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. 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 Somany Ceramics insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Somany Ceramics. For example, Somany Ceramics has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

But note: Somany Ceramics 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, but not derivative transactions.

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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.
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