Possible Signal As Ruchi Infrastructure Insiders Sell ₹92m In Stock

Last week, Ruchi Infrastructure Limited's (NSE:RUCHINFRA) stock jumped 15%, but insiders who sold ₹92m worth of stock in over the past year are likely to be in a better position. Selling at an average price of ₹14.79, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Ruchi Infrastructure

The Last 12 Months Of Insider Transactions At Ruchi Infrastructure

The insider, Aditi Gowani, made the biggest insider sale in the last 12 months. That single transaction was for ₹17m worth of shares at a price of ₹14.82 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is ₹11.73. So it may not shed much light on insider confidence at current levels.

In the last year Ruchi Infrastructure insiders didn't buy any company stock. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Ruchi Infrastructure Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Ruchi Infrastructure shares. In total, insiders sold ₹14m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Ruchi Infrastructure

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. From our data, it seems that Ruchi Infrastructure insiders own 14% of the company, worth about ₹401m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Ruchi Infrastructure Insider Transactions Indicate?

Insiders haven't bought Ruchi Infrastructure stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 Ruchi Infrastructure and understanding these should be part of your investment process.

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 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.