We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
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The Last 12 Months Of Insider Transactions At Sree Rayalaseema Hi-Strength Hypo
Over the last year, we can see that the biggest insider purchase was by Chairman Tumbalam Bharath for ₹9.8m worth of shares, at about ₹98.19 per share. We do like to see buying, but this purchase was at a lower price. The insider buying may not tell us much about how insiders feel about the current share price.
You can see the insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data indicates that Sree Rayalaseema Hi-Strength Hypo insiders own about ₹311m worth of shares (which is 12% of the company). However, it’s possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About Sree Rayalaseema Hi-Strength Hypo Insiders?
The fact that there have been no Sree Rayalaseema Hi-Strength Hypo insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Sree Rayalaseema Hi-Strength Hypo insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. Along with insider transactions, I recommend checking if Sree Rayalaseema Hi-Strength Hypo is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Sree Rayalaseema Hi-Strength Hypo may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 editorial-team@simplywallst.com.