Read This Before Selling Bhansali Engineering Polymers Limited (NSE:BEPL) Shares

We often see insiders buying up shares in companies that perform well over the long term. 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 Bhansali Engineering Polymers Limited (NSE:BEPL), you may well want to know whether insiders have been buying or selling.

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, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Bhansali Engineering Polymers

Bhansali Engineering Polymers Insider Transactions Over The Last Year

CFO, Executive Director & Promoter Jayesh Bhansali made the biggest insider purchase in the last 12 months. That single transaction was for ₹40m worth of shares at a price of ₹159 each. That means that even when the share price was higher, an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.

In the last twelve months insiders paid ₹89m for 550.28k shares purchased. In the last twelve months there was more buying than selling by Bhansali Engineering Polymers insiders. They paid about ₹162 on average. These transactions suggest that insiders have considered the current price of ₹71.50 attractive. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Bhansali Engineering Polymers is not the only stock that insiders are buying. For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.

Have Bhansali Engineering Polymers Insiders Traded Recently?

We saw some Bhansali Engineering Polymers insider buying shares in the last three months. Deoki Mishra bought ₹482k worth of shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership of Bhansali Engineering Polymers

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Bhansali Engineering Polymers insiders own 28% of the company, currently worth about ₹3.3b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Bhansali Engineering Polymers Insider Transactions Indicate?

It is good to see recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Bhansali Engineering Polymers insiders are well aligned, and quite possibly think the share price is too low. Nice! I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

But note: Bhansali Engineering Polymers may not be the best stock to buy. So take a peek at this freelist of interesting companies with high ROE and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.