Did Tokyo Plast International Limited (NSE:TOKYOPLAST) Insiders Buy Up More Shares?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Tokyo Plast International Limited (NSE:TOKYOPLAST), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Tokyo Plast International

Tokyo Plast International Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Dharmil Shah bought ₹5.2m worth of shares at a price of ₹59.60 per share. That means that an insider was happy to buy shares at around the current price of ₹68.30. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.

Happily, we note that in the last year insiders paid ₹26m for 427.87k shares. But insiders sold 56.83k shares worth ₹3.5m. In the last twelve months there was more buying than selling by Tokyo Plast International insiders. 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!

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.

Insiders at Tokyo Plast International Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Tokyo Plast International. In total, three insiders bought ₹26m worth of shares in that time. But insider Bharat Shah sold shares worth ₹3.5m. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Does Tokyo Plast International Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Tokyo Plast International insiders own 81% of the company, currently worth about ₹530m 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 Tokyo Plast International Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Tokyo Plast International. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Tokyo Plast International and understanding them should be part of your investment process.

Of course Tokyo Plast International 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.

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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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