Insider Spends ₹58m Buying More Shares In Zodiac Energy

Those following along with Zodiac Energy Limited (NSE:ZODIAC) will no doubt be intrigued by the recent purchase of shares by Jaxay Shah, Non-Executive Director of the company, who spent a stonking ₹58m on stock at an average price of ₹611. Not only is that a big swing, but it increased their holding size by 42%, which is definitely great to see.

See our latest analysis for Zodiac Energy

Zodiac Energy Insider Transactions Over The Last Year

Notably, that recent purchase by Jaxay Shah is the biggest insider purchase of Zodiac Energy shares that we've seen in the last year. So it's clear an insider wanted to buy, at around the current price, which is ₹662. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Zodiac Energy share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid ₹63m for 108.91k shares. But they sold 93.78k shares for ₹57m. Overall, Zodiac Energy insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Zodiac Energy is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Zodiac Energy insiders own 73% of the company, currently worth about ₹7.3b based on the recent share price. 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 Do The Zodiac Energy Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Zodiac Energy. One for the watchlist, at least! 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. In terms of investment risks, we've identified 2 warning signs with Zodiac Energy and understanding these should be part of your investment process.

But note: Zodiac Energy 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.