Have Insiders Been Buying UltraTech Cement Limited (NSE:ULTRACEMCO) Shares?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in UltraTech Cement Limited (NSE:ULTRACEMCO).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the 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. 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'.

See our latest analysis for UltraTech Cement

UltraTech Cement Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman Kumar Birla bought ₹497m worth of shares at a price of ₹4,522 per share. Even though the purchase was made at a significantly lower price than the recent price (₹6,420), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid ₹1.6b for 350.01k shares. On the other hand they divested 2.05k shares, for ₹9.8m. In total, UltraTech Cement insiders bought more than they sold over the last year. 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!

UltraTech Cement 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.

Insiders at UltraTech Cement Have Sold Stock Recently

The last three months saw some UltraTech Cement insider selling. The selling netted ₹4.4m for insider Sunjoy Poddar. But the good news is that there was purchasing too , worth ₹1.0m. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Does UltraTech Cement Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.1% of UltraTech Cement shares, worth about ₹2.3b. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The UltraTech Cement Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at UltraTech Cement, in the last three months. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. 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. While conducting our analysis, we found that UltraTech Cement has 2 warning signs and it would be unwise to ignore them.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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