Insiders' ₹57.5m Investments In Red Following Indian Terrain Fashions' ₹260m Dip In Market Value

The recent 12% drop in Indian Terrain Fashions Limited's (NSE:INDTERRAIN) stock could come as a blow to insiders who purchased ₹57.5m worth of stock at an average buy price of ₹70.07 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth ₹35.4m, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Indian Terrain Fashions

The Last 12 Months Of Insider Transactions At Indian Terrain Fashions

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Venkatesh Rajagopal bought ₹57m worth of shares at a price of ₹70.07 per share. That means that an insider was happy to buy shares at above the current price of ₹43.12. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. 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 Venkatesh Rajagopal.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Indian Terrain Fashions is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Indian Terrain Fashions insiders own 43% of the company, currently worth about ₹860m 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 Does This Data Suggest About Indian Terrain Fashions Insiders?

It doesn't really mean much that no insider has traded Indian Terrain Fashions shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Indian Terrain Fashions insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Indian Terrain Fashions. Case in point: We've spotted 2 warning signs for Indian Terrain Fashions you should be aware of.

But note: Indian Terrain Fashions 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.