Insider Buyers Lose ₹11m As Bigbloc Construction Sheds ₹1.4b

The recent 14% drop in Bigbloc Construction Limited's (NSE:BIGBLOC) stock could come as a blow to insiders who purchased ₹26.1m worth of stock at an average buy price of ₹107 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth ₹15.1m, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Bigbloc Construction

The Last 12 Months Of Insider Transactions At Bigbloc Construction

Over the last year, we can see that the biggest insider purchase was by insider Madhu Saboo for ₹11m worth of shares, at about ₹124 per share. That means that even when the share price was higher than ₹61.63 (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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Bigbloc Construction insiders were buying shares, but not selling. The average buy price was around ₹107. These transactions suggest that insiders have considered the current price attractive. 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. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Bigbloc Construction Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Bigbloc Construction. We can see that Non-Executive Non-Independent Chairman Narayan Saboo paid ₹9.6m for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Does Bigbloc Construction Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Bigbloc Construction insiders own about ₹2.9b worth of shares. That equates to 34% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Bigbloc Construction Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Bigbloc Construction insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we've spotted with Bigbloc Construction (including 1 which is potentially serious).

Of course Bigbloc Construction may not be the best stock to buy. So you may wish to see this free collection of high quality 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.