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 Gulf Oil Lubricants India Limited (NSE:GULFOILLUB).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
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. 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’.
The Last 12 Months Of Insider Transactions At Gulf Oil Lubricants India
In the last twelve months, the biggest single sale by an insider was when Senior Vice President of Supply Chain Sunil Jambavdekar sold ₹7.5m worth of shares at a price of ₹835 per share. That means that an insider was selling shares at below the current price (₹850). Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was 99.9% of Sunil Jambavdekar’s holding.
We note that in the last year insiders divested 49.15k shares for a total of ₹42m. Over the last year we saw more insider selling of Gulf Oil Lubricants India shares, than buying. The sellers received a price of around ₹859, on average. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Gulf Oil Lubricants India better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Gulf Oil Lubricants India Insiders Are Selling The Stock
The last three months saw significant insider selling at Gulf Oil Lubricants India. In total, insiders sold ₹25m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Does Gulf Oil Lubricants India Boast High Insider Ownership?
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. A high insider ownership often makes company leadership more mindful of shareholder interests. From what we can see in our data, insiders own only about ₹55m worth of Gulf Oil Lubricants India shares. However, it’s possible that insiders might have an indirect interest through a more complex structure. This level of insider ownership is notably low, and not very encouraging.
What Might The Insider Transactions At Gulf Oil Lubricants India Tell Us?
Insiders sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. On the plus side, Gulf Oil Lubricants India makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Gulf Oil Lubricants India, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.