Insiders Who Purchased ₹59.6m Of Ugar Sugar Works Stock May Not Have Expected 10% Tumble

Insiders who acquired ₹59.6m worth of The Ugar Sugar Works Limited's (NSE:UGARSUGAR) stock at an average price of ₹57.28 in the past 12 months may be dismayed by the recent 10% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth ₹45.5m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Ugar Sugar Works Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when MD & Director Chandan Shirgaokar bought ₹15m worth of shares at a price of ₹70.52 per share. That means that even when the share price was higher than ₹43.75 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Ugar Sugar Works insiders bought shares during the last year, they didn't sell. Their average price was about ₹57.28. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Ugar Sugar Works

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Ugar Sugar Works Have Bought Stock Recently

It's good to see that Ugar Sugar Works insiders have made notable investments in the company's shares. In total, insiders bought ₹27m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership Of Ugar Sugar Works

For a common shareholder, it is worth checking how many shares are held by company 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 Ugar Sugar Works insiders own 13% of the company, worth about ₹641m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Ugar Sugar Works Insiders?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Ugar Sugar Works. One for the watchlist, at least! 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. Every company has risks, and we've spotted 4 warning signs for Ugar Sugar Works (of which 3 are significant!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.