Had insiders known Thirumalai Chemicals Limited (NSE:TIRUMALCHM) would hit ₹23b they might have invested more last year

Simply Wall St
March 15, 2022
Source: Shutterstock

Last week, Thirumalai Chemicals Limited (NSE:TIRUMALCHM) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 14% last week, resulting in a ₹2.7b increase in the company's market worth. As a result, the stock they originally bought for ₹12m is now worth ₹13m.

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.

Check out our latest analysis for Thirumalai Chemicals

The Last 12 Months Of Insider Transactions At Thirumalai Chemicals

The Chairman & MD Rangaswamy Parthasarathy made the biggest insider purchase in the last 12 months. That single transaction was for ₹4.0m worth of shares at a price of ₹215 each. That implies that an insider found the current price of ₹223 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. 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. Happily, the Thirumalai Chemicals insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 58.78k shares worth ₹12m. But insiders sold 8.00k shares worth ₹1.9m. In total, Thirumalai Chemicals insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NSEI:TIRUMALCHM Insider Trading Volume March 15th 2022

Thirumalai Chemicals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Thirumalai Chemicals Insiders Bought Stock Recently

It's good to see that Thirumalai Chemicals insiders have made notable investments in the company's shares. In total, insiders bought ₹11m worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 16% of Thirumalai Chemicals shares, worth about ₹3.7b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Thirumalai Chemicals Insiders?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Thirumalai Chemicals. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Thirumalai Chemicals. At Simply Wall St, we found 1 warning sign for Thirumalai Chemicals that deserve your attention before buying any shares.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.