Despite recent gains, Usha Martin Limited (NSE:USHAMART) insiders are still down ₹1.7m after purchasing last year

Published
June 28, 2022
NSEI:USHAMART
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Insiders who bought ₹15m worth of Usha Martin Limited (NSE:USHAMART) stock in the last year recovered part of their losses as the stock rose by 13% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at ₹1.7m since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Usha Martin

Usha Martin Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Stuti Agarwalla bought ₹6.8m worth of shares at a price of ₹136 per share. That means that an insider was happy to buy shares at above the current price of ₹119. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Usha Martin insiders may have bought shares in the last year, but they didn't sell any. 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!

insider-trading-volume
NSEI:USHAMART Insider Trading Volume June 28th 2022

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.

Insiders at Usha Martin Have Bought Stock Recently

It's good to see that Usha Martin insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought ₹15m worth of shares. This makes one think the business has some good points.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Usha Martin insiders own 4.3% of the company, worth about ₹1.5b. 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 Usha Martin Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Usha Martin insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Usha Martin has 2 warning signs we think you should be aware of.

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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