Had insiders known Hi-Tech Pipes Limited (NSE:HITECH) would hit ₹7.2b they might have invested more last year

By
Simply Wall St
Published
April 19, 2022
NSEI:HITECH
Source: Shutterstock

Last week, Hi-Tech Pipes Limited (NSE:HITECH) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a ₹736m increase in the company's market worth. As a result, the stock they originally bought for ₹35m is now worth ₹146m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Hi-Tech Pipes

Hi-Tech Pipes Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman & MD Ajay Bansal for ₹18m worth of shares, at about ₹123 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹585. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 250.00k shares for ₹35m. But insiders sold 30.00k shares worth ₹18m. In the last twelve months there was more buying than selling by Hi-Tech Pipes insiders. They paid about ₹139 on average. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

insider-trading-volume
NSEI:HITECH Insider Trading Volume April 19th 2022

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Hi-Tech Pipes insiders own 57% of the company, currently worth about ₹4.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Hi-Tech Pipes Insiders?

It doesn't really mean much that no insider has traded Hi-Tech Pipes shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Hi-Tech Pipes insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for Hi-Tech Pipes (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

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. We currently account for open market transactions and private dispositions, but not derivative transactions.

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