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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 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 Selling?
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 don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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 the MD & Director, Ravi Chawla, sold ₹9.0m worth of shares at a price of ₹905 per share. So we know that an insider sold shares at around the present share price of ₹832. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Over the last year, we note insiders sold 77109 shares worth ₹67m. Insiders in Gulf Oil Lubricants India didn’t buy any shares in the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Insiders at Gulf Oil Lubricants India Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Gulf Oil Lubricants India. In total, insiders sold ₹31m 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
For a common shareholder, it is worth checking how many shares are held by company 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 ₹40m worth of shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We might be missing something but that seems like very low insider ownership.
So What Does This Data Suggest About Gulf Oil Lubricants India Insiders?
Insiders haven’t bought Gulf Oil Lubricants India stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. On the plus side, Gulf Oil Lubricants India makes money, and is growing profits. Insiders own shares, but we’re still pretty cautious, given the history of sales. 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.
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.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.