It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Chambal Fertilisers and Chemicals Limited (NSE:CHAMBLFERT).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia 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’.
Chambal Fertilisers and Chemicals Insider Transactions Over The Last Year
While no particular insider transaction stood out, we can still look at the overall trading.
In the last twelve months insiders netted ₹6.8m for 40.50k shares sold. In total, Chambal Fertilisers and Chemicals insiders sold more than they bought over the last year. The average sell price was around ₹168. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Chambal Fertilisers and Chemicals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Chambal Fertilisers and Chemicals Have Sold Stock Recently
The last three months saw some Chambal Fertilisers and Chemicals insider selling. Insiders sold just ₹2.2m worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the amount sold isn’t enough for us to put any weight on it.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 6.2% of Chambal Fertilisers and Chemicals shares, worth about ₹4.3b. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Chambal Fertilisers and Chemicals Tell Us?
Insiders sold Chambal Fertilisers and Chemicals shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. But it is good to see that Chambal Fertilisers and Chemicals is growing earnings. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Chambal Fertilisers and Chemicals.
Of course Chambal Fertilisers and Chemicals 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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