It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell STEL Holdings Limited (NSE:STEL), 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.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
STEL Holdings Insider Transactions Over The Last Year
The insider Harsh Goenka made the biggest insider purchase in the last 12 months. That single transaction was for ₹8.6m worth of shares at a price of ₹61.32 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹102. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Harsh Goenka bought a total of 185.00k shares over the year at an average price of ₹66.41. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does STEL Holdings Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 12% of STEL Holdings shares, worth about ₹228m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At STEL Holdings Tell Us?
We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like STEL Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing STEL Holdings. Case in point: We've spotted 4 warning signs for STEL Holdings you should be aware of.
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, 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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