It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we’ll take a look at whether insiders have been buying or selling shares in Gulf Oil Lubricants India Limited (NSE:GULFOILLUB).
Do Insider Transactions Matter?
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, 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Gulf Oil Lubricants India Insider Transactions Over The Last Year
Senior Vice President of Supply Chain Sunil Jambavdekar made the biggest insider sale in the last 12 months. That single transaction was for ₹5.9m worth of shares at a price of ₹814 each. So we know that an insider sold shares at around the present share price of ₹766. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
In the last twelve months insiders netted ₹19m for 20.67k shares sold. 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!
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 quarter saw substantial insider selling of Gulf Oil Lubricants India shares. In total, Sunil Jambavdekar dumped ₹5.9m 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.
Insider Ownership of Gulf Oil Lubricants India
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our information indicates that Gulf Oil Lubricants India insiders own about ₹533k worth of shares. This level of insider ownership is notably low, and not very encouraging.
So What Do The Gulf Oil Lubricants India Insider Transactions Indicate?
An insider haven’t bought Gulf Oil Lubricants India stock in the last three months, but they sure did sell some. Furthermore, transactions over the last twelve months dispel the notion that insiders won’t sell readily. But it is good to see that Gulf Oil Lubricants India is growing earnings. When you combine this with the relatively low insider ownership, we are very cautious about the stock. As the saying goes, only fools rush in. 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.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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 email@example.com.