We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Eris Lifesciences Limited (NSE:ERIS).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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The Last 12 Months Of Insider Transactions At Eris Lifesciences
Over the last year, we can see that the biggest insider purchase was by Chairman & MD Amit Bakshi for ₹40m worth of shares, at about ₹618 per share. That means that an insider was happy to buy shares at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price.
Happily, we note that in the last year insiders bought 171.38k shares for a total of ₹104m. Overall, Eris Lifesciences insiders were net buyers last year. Their average price was about ₹605. Although they bought at below the recent price of ₹678 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Eris Lifesciences Insiders Bought Stock Recently
Over the last quarter, Eris Lifesciences insiders have spent a meaningful amount on shares. Overall, 2 insiders shelled out ₹104m for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Does Eris Lifesciences 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. We usually like to see fairly high levels of insider ownership. Eris Lifesciences insiders own about ₹74b worth of shares (which is 79% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Eris Lifesciences Tell Us?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Eris Lifesciences. Looks promising! Of course, the future is what matters most. So if you are interested in Eris Lifesciences, you should check out this free report on analyst forecasts for the company.
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.
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 email@example.com.