We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Sanwaria Consumer Limited (NSE:SANWARIA).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Sanwaria Consumer Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Beenu Garg, sold ₹170m worth of shares at a price of ₹18.42 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of ₹9.20. So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders purchased 48000 shares for ₹638k. On the other hand they divested 9.3m shares, for ₹171m. All up, insiders sold more shares in Sanwaria Consumer than they bought, over the last year. The chart below shows insider transactions (by 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. Sanwaria Consumer insiders own 41% of the company, currently worth about ₹2.8b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Sanwaria Consumer Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Sanwaria Consumer shares in the last quarter. While we feel good about high insider ownership of Sanwaria Consumer, we can’t say the same about the selling of shares. Along with insider transactions, I recommend checking if Sanwaria Consumer is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Sanwaria Consumer may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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