Naresh Bansal Is The Chairman & MD of Rama Steel Tubes Limited (NSE:RAMASTEEL) And Just Spent ₹1.1m On Shares

Whilst it may not be a huge deal, we thought it was good to see that the Rama Steel Tubes Limited (NSE:RAMASTEEL) Chairman & MD, Naresh Bansal, recently bought ₹1.1m worth of stock, for ₹46.52 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for Rama Steel Tubes

Rama Steel Tubes Insider Transactions Over The Last Year

In fact, the recent purchase by Chairman & MD Naresh Bansal was not their only acquisition of Rama Steel Tubes shares this year. They previously made an even bigger purchase of ₹1.5m worth of shares at a price of ₹41.96 per share. That implies that an insider found the current price of ₹48.75 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Rama Steel Tubes share holders is that an insider was buying at near the current price. Naresh Bansal was the only individual insider to buy shares in the last twelve months.

Naresh Bansal bought a total of 94.67k shares over the year at an average price of ₹42.02. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Rama Steel Tubes

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Rama Steel Tubes insiders own about ₹667m worth of shares (which is 81% of the company). 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 Rama Steel Tubes Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Rama Steel Tubes. Nice! 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. Every company has risks, and we've spotted 4 warning signs for Rama Steel Tubes (of which 2 make us uncomfortable!) you should know about.

Of course Rama Steel Tubes may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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