Ruchi Infrastructure Insiders Make Handsome Sum Selling Stock At ₹13.04 Per Share

Despite a 23% gain in Ruchi Infrastructure Limited's (NSE:RUCHINFRA) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of ₹14m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Ruchi Infrastructure

The Last 12 Months Of Insider Transactions At Ruchi Infrastructure

The insider, Ruchi Shahra, made the biggest insider sale in the last 12 months. That single transaction was for ₹7.2m worth of shares at a price of ₹12.15 each. That means that an insider was selling shares at slightly below the current price (₹17.51). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 25% of Ruchi Shahra's holding. The only individual insider seller over the last year was Ruchi Shahra.

Ruchi Shahra ditched 1.09m shares over the year. The average price per share was ₹13.04. 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!

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Insiders At Ruchi Infrastructure Have Sold Stock Recently

The last three months saw significant insider selling at Ruchi Infrastructure. In total, insider Ruchi Shahra 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.

Does Ruchi Infrastructure Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 17% of Ruchi Infrastructure shares, worth about ₹688m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Ruchi Infrastructure Tell Us?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Ruchi Infrastructure is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Our analysis shows 5 warning signs for Ruchi Infrastructure (1 is a bit concerning!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.